RUBB

sdi-2.jpgSDI Group plc (“SDI” or “the Group”) (AIM: SDIG.L), which designs, builds and supports integrated materials handling solutions for international retail, wholesale, fulfillment and e-commerce distribution operations, is pleased to announce the acquisition of four companies from P.E.P. Beteiligungsgesellschaft mbH (“PEP”) in Germany for a total consideration of EUR2.76m.

PEP was founded in 1996 and is one of Germany’s leading materials handling solutions providers. The four companies: PEP Fördertechnik GmbH, PEP Anlagenbau GmbH, PEP Systemtechnik GmbH and Innova Plast Kunststofftechnik GmbH, employ 46 staff and have customers that include C&A in Germany, DHL in Germany and Denmark, JBC in Belgium and La Poste in France. In the year to 31 December 2007, the four companies produced a combined profit before tax of EUR393k (unaudited) and had net assets of EUR1.85m (unaudited) as at 31 December 2007.

SDI is purchasing the entire issued share capital of the four companies from PEP and some minority interests for a total consideration of EUR2.76m, of which EUR1.76m will be paid in SDI Group shares and EUR1.0m in cash from existing bank balances. The cash element of the consideration will be payable in three tranches: EUR0.6m on completion, EUR0.2m on 1 April 2009 and EUR0.2m on 1 April 2010. The SDI shares issued as consideration will be the subject of a lock in agreement running until 2010.

To satisfy the equity element of the consideration, application will be made for 2,973,077 New Ordinary Shares of 1p each to be admitted to trading on AIM and it is anticipated that admission will become effective and that trading in the New Ordinary Shares on AIM will commence on 18 April 2008.

The acquisitions follow the Group’s stated strategy of geographical expansion, initially into Germany, India and Brazil. They also reflect the importance of the German domestic market and will allow SDI to effectively compete as a full service integrator in a market approximately the size of the UK. The four companies, along with the Group’s existing German software business, will form the foundation of our SDI Germany operation, which will be run by the recently recruited former Chief Executive of a major global competitor. SDI will immediately commence sales of PEP’s excellent product range across the Group and the Directors expect this enhanced product portfolio to be well received by the Group’s international customer base. With the initiatives already taken in Germany and following the PEP acquisition, the Directors expect that, over time, the Group’s German business will become a key part of the SDI Group.

Commenting on the acquisition, Gordon Smith, CEO of SDI Group said: “This acquisition of the PEP companies provides SDI Group with instant exposure to the fast growing German market and provides us with access to PEP’s market leading range of products which we will be able to sell to our customers worldwide.Whilst we expect the acquisition to be earnings neutral in the current financial year, we believe it to be of enormous strategic importance going forward and will further extend our footprint and presence in the European market.”

SDI Group provides consultancy services and designs its customers warehousing and distribution systems with end products including sorters and picking systems, automated retrieval systems and conveyor systems, together with supporting IT infrastructure.

SDI Group companies have operated for more than 30 years in the US and for over a decade in the UK. It employs over 500 people with subsidiaries additionally spanning France, Spain, Germany, the Netherlands, Italy, Chile and Brazil.

SDI Greenstone
Tel: 01788 574666
www.sdigroupuk.com

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