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19th October 2007
Not for release, publication or distribution, in whole or in part, in, into, or from the United States, Australia, Canada or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction
FOR IMMEDIATE RELEASE
AGA FOODSERVICE GROUP PLC
PROPOSED SALE OF AGA FOODSERVICE EQUIPMENT
• Aga Foodservice Group plc (“Aga” or the “Company”) announces that it has entered into a conditional agreement to sell Aga Foodservice Equipment (“AFE”), its commercial foodservice and bakery equipment business, to Ali SpA, the major Italian commercial foodservice equipment manufacturer, for a cash consideration, subject to adjustment, of £260 million (including assumption or repayment of net debt).
• In the financial year ended 31 December 2006, AFE made an operating profit of £21.2 million on revenues of £250.3 million.
• The Board of Aga (the “Board”) intends to return to shareholders a significant proportion of the available net proceeds of the proposed sale. This return will be conditional on the consent of the trustees of the Aga Foodservice Group Pension Scheme (the “Pension Scheme”) and the Pensions Regulator, a corporate reorganisation to create the necessary reserves and further shareholder approval. The Board intends that the return will be effected in the first quarter of 2008.
• In relation to the sale of AFE, Aga has reached agreement with the trustees of the Pension Scheme in relation to the consequences which would otherwise arise under section 75 of the Pensions Act 1995. This agreement has been approved by the Pensions Regulator. Pursuant to this agreement, the Aga Group has agreed to pay £10 million into the Pension Scheme and to provide a guarantee of £22.5 million to support an undertaking to make up any deficit identified by the next two triennial actuarial valuations and/or to make a payment if there is a material deterioration in the covenant of the Company.
• The Pension Scheme is well funded on an IAS19 basis. Aga is considering, in conjunction with the trustees of the Pension Scheme and the respective specialist pensions advisers, ways in which to accelerate the Pension Scheme becoming self sufficient with the objective of reducing risk and enhancing long-term shareholder value.
• The sale of AFE will enable Aga to focus on growing the profitability of its consumer business, which has market-leading positions in premium kitchen appliances, underpinned by the Aga, Rangemaster and Marvel brands. The Board intends to focus on organic growth rather than acquisitions.
• Following the achievement of this important strategic milestone, Victor Cocker has decided to stand down from the Board at Aga’s next Annual General Meeting after seven years’ service, including nearly four as Chairman.
• The Board will continue to consider all options for maximising and delivering best value for shareholders.
William McGrath, Chief Executive of Aga, commented:
“It is pleasing to agree this sale at a good price to a group which is already driving change in the foodservice equipment sector. We will now focus on developing our consumer operations and on the best way of delivering value to shareholders.”
This summary should be read in conjunction with the full announcement.
Download Announcement PDF
A circular containing further details of the proposed sale of AFE, including notice of an extraordinary general meeting and the Board's recommendation to shareholders to vote in favour of the sale, will be posted to Aga shareholders as soon as possible.
To listen to the Analysts call regarding this press release please click here.
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Presentation on the Continuing Business
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Contacts
Aga Foodservice Group plc
William McGrath – Chief Executive 0121 711 6000
Shaun Smith – Finance Director 0121 711 6000
Dresdner Kleinwort
Rosalind Hedley-Miller 020 7623 8000
Alex Reynolds 020 7623 8000
Citi
Christopher Daniels 020 7986 7459
Simon Alexander 020 7986 0963
Brunswick
Simon Sporborg 020 7404 5959
Charlotte Kenyon 020 7404 5959
This announcement is for information purposes only and does not constitute an offer or invitation to acquire or dispose of any securities or investment advice in any jurisdiction.
This announcement contains a number of forward-looking statements relating to Aga with respect to, amongst other things, the following: financial condition; results of operations; economic conditions in which Aga operates; the business of Aga; future benefits of the transaction; and management plans and objectives. Aga considers any statements which are not historical facts to be "forward-looking statements". They relate to events and trends which are subject to risks and uncertainties which could cause the actual results and financial position of Aga to differ materially from the information presented in the relevant forward-looking statement. When used in this announcement, the words "estimate", "project", "intend", "aim", "anticipate", "believe", "expect", "should" and similar expressions, as they relate to Aga or the management of Aga, are intended to identify such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. Aga does not undertake to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirement under applicable laws and regulations.
Dresdner Kleinwort Limited (“Dresdner Kleinwort”) and Citigroup Global Markets Limited (“Citi”), which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for Aga Foodservice Group plc and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Aga Foodservice Group plc for providing the protections afforded to customers of Dresdner Kleinwort Limited and/or Citigroup Global Markets Limited or for providing advice in relation to the contents of this announcement or any other matters referred to herein.
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