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OPD Group plc - Sale of a majority interest in Odgers

OPD Group plc - Sale of a majority interest in Odgers by OPD to management and senior employees of Odgers

OPD Group plc ("OPD" or the "Company") announces that it has entered into an agreement to sell International Resources Group Limited ("Odgers") to a new company to be owned as to 50.5 per cent. by the management of Odgers, certain senior employees and the Odgers Employee Benefit Trust. OPD will hold the remaining 49.5 per cent. shareholding interest in the new company.


The transaction will be undertaken by way of a sale of the entire issued share capital of Odgers to Newco, a new company established for the purpose. At completion Newco will be 49.5 per cent owned by OPD and 50.5 per cent. owned principally by the senior management of Odgers (the "Senior Management"), certain senior employees and its Employee Benefit Trust (the "Transaction").

Newco has agreed to acquire Odgers from OPD for a total consideration of 16.0 million, which will comprise 5.05 million in cash, the issue of a 6.0 million loan note (the "Loan Note") and a 49.5 per cent. shareholding in Newco. OPD's shareholding in Newco has been valued at 4.95 million, based on the price at which the other proposed shareholders of Newco have agreed to subscribe for their shares.

Before taking account of the interest receivable on the Loan Note, upon full repayment of the Loan Note, OPD will have received net consideration of 11.05 million in cash and at Completion will have a shareholding of 49.5 per cent. in Newco.

Immediately prior to Completion, Odgers will distribute 2.0 million in cash to OPD by means of an interim dividend, which does not form part of the consideration under the Transaction, and at Completion Odgers will make a contribution towards the costs of the Transaction incurred by OPD and Newco.

With the expiry of the earn-out period following OPD's original acquisition of Odgers and given the nature of the Odgers business and its dependence on the knowledge, contacts and expertise of its people, the Board believes that the co-investment model will best align the commercial interests of OPD shareholders and the management and employees of Odgers. The Board has concluded that sharing the risks and rewards of ownership of Odgers between OPD, the Senior Management and certain employees of Odgers will reduce the inherent risk in the continued exclusive ownership of Odgers by OPD, in particular the ability to attract, retain, appropriately remunerate and motivate key employees.

Although a strengthening of OPD's balance sheet is not the principal reason for the Transaction, an ancillary benefit is that the Company's liquidity position will improve by 5.05 million at Completion and thereafter by subsequent repayment of the Loan Note.

General Meeting

The Transaction is conditional on the approval of OPD shareholders and a notice convening a general meeting for considering the necessary resolutions (the "Resolutions") will be sent to OPD shareholders.

OPD has received an irrevocable undertaking to vote in favour of, or procure a vote in favour of, the Resolutions from Offerco Limited, which holds 16,838,356 Shares, representing approximately 63.09 per cent. of the total issued share capital of the Company.


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