Logica buys Team121

LOGICA ANNOUNCES ACQUISITION OF TEAM 121
London, 24 June 1999

PR NEWSWIRE: This press release is transmitted on behalf of Logica.

Acquisition of Team 121, a leading UK provider of SAP based solutions for the industry
and utilities sectors, for £74.5 million comprising a combination of new Logica ordinary
shares and cash. In addition, Logica has committed a further£13.8 million in new Logica
ordinary shares for certain key senior managers of Team 121
This acquisition is expected to be earnings enhancing, before goodwill amortisation,
across both the first and second halves of Logica's next financial year starting 1 July 1999
Fully underwritten placing of 18.4 million new ordinary Logica shares for cash to raise
£113.7 million (net of expenses) to finance the £15 million cash element of the
acquisition of Team 121 and to refinance debt incurred from five recent acquisitions
which together totalled £86.5 million. The placing is not conditional on completion of
the acquisition of Team 121
Logica's trading performance continues to be very positive and the company is confident
of an excellent outcome for the year ending 30 June 1999. This performance reflects
strong growth, both organically and from acquisitions, particularly in the telecoms
market. The outlook for the next six months is strong and the Board of Logica looks
forward with confidence to a further year of superior growth

Martin Read, Logica plc's managing director and chief executive said, "This acquisition
strengthens the all-embracing service Logica offers its clients. It greatly enhances our ERP
capability, a key tool to support growth in the energy and utilities, industry and


telecommunications sectors. It will also allow us to enter the business process outsourcing
market for SAP applications. I believe that this move will create new opportunities for Logica
and will further enhance our position as the global solutions company."

Iain Barker, Team 121's chief executive officer highlighted, "This is an exciting time for Team
121's staff and clients. By joining with Logica we will create a powerful new force in the
market and extend the scope and range of activities available to our staff. I believe that this
will mark a significant new stage in Logica's growth."

Logica announces its offer to acquire Team 121, one of the UK's market leaders in SAP
implementation primarily focused on the industry and utilities sectors. The consideration
will be a combination of new Logica ordinary shares and up to £14 million cash. The
acquisition is expected to be earnings enhancing, before goodwill amortisation, across both
the first and second halves of Logica's next financial year starting 1 July 1999.

Team 121 is a leading independent provider of SAP based solutions. Founded in 1990 by its
chairman and managing director Iain Barker, Team 121 currently employs over 400 people
across its offices in the UK and Norway. The company has also started to win significant
business in other European markets.

Team 121's key activities include SAP consulting and implementation across all areas of ERP
for both large organisations and small to medium sized enterprises.

Team 121's audited financial record for the past four years is as follows:

£million 1996 1997 1998* 1999*
Year ended 30 April

Turnover 5.0 9.6 16.7 36.2
EBIT 0.5 1.1 2.3 3.6**

*Numbers stated post 1998 group reorganisation
**Before £0.4 million of sale related costs

At 30 April 1999, Team 121's net assets were £3.1 million.

Team 121 will be integrated with Logica's UK business and will be the heart of a new centre
of excellence in SAP implementation skills across Europe. This is an important step for Logica
as it provides the company with a strong concentration of SAP skills and customers, with
clients such as Chubb, Invensys and most recently Yorkshire Water which announced a £5
million SAP contract last week. Team 121 is accredited with the SAP logo partnership
programme.

The acquisition will strengthen Logica's portfolio of skills to support its current growth areas.
It also puts the company in a strong position to benefit from the next wave in ERP growth
stimulated by such developments as web enablement and e-commerce connectivity for


existing SAP users. These advances further enhance Logica's overall capabilities in customer
relationship management solutions.

Logica's existing capabilities in e-commerce, customer relationship management, data
warehousing and customer care and billing will be further supported and enhanced by this
acquisition. It is expected that the acquisition will give the company an opportunity to
significantly enhance its ERP capabilities in UK and Europe. The acquisition will also enable
Logica to become a major player in the business process outsourcing market for SAP
applications.

All of the key management team of Team 121, including Iain Barker, are entering into new
service agreements with Logica.

OFFER STRUCTURE

Although Team 121 is a private company, in view of the number of shareholders, the
majority being Team 121 employees, the acquisition is being made by way of a formal
recommended takeover offer. Shareholders in Team 121 are being offered 12.554 new
ordinary shares in Logica for every Team 121 share (the "Offer"), valuing Team 121 at £73.4
million based on Logica's middle market quotation at the close of business on 23 June 1999.
Logica will also pay Team 121 shareholders' costs totalling £1.1 million. Team 121
shareholders may elect to receive up to £14.0 million cash in lieu of Logica shares.
Shareholders representing over 90 per cent of Team 121's fully diluted share capital have
irrevocably undertaken to accept the Offer and have elected for the partial cash election in
full. Full acceptance of the partial cash election will result in the issue of a maximum of 9.2
million new Logica shares. It is expected that the Offer will become wholly unconditional on
28 June 1999.

Dealing restrictions will apply for up to one year to the new Logica shares to be issued to
Team 121 shareholders under the Offer. Further, in relation to 4.0 million new Logica shares
to be issued in connection with the acquisition of Iain Barker's registered holding in Team
121, half will be locked up for one year and half for two years.

The issue of 0.9 million new Logica shares under the Offer will be deferred for two years
subject to any claims arising under the representations, warranties and indemnities given to
Logica by certain shareholders in connection with the business of Team 121.

A further 1.9 million new Logica shares, currently valued at £12.5 million, will be issued in
equal annual tranches over the next three years to Iain Barker in consideration for him
complying with the terms of a deed of restrictive covenant and continuing to be employed
by Logica during each of the three years. Logica is also providing new incentive
arrangements for senior management of Team 121.

SHARE PLACING

Logica also intends to raise approximately £113.7 million, net of expenses, by way of a
placing for cash of 18.4 million new ordinary shares representing approximately 5.0 per cent


of its current issued share capital. The new shares will rank paripassu with the existing
issued ordinary shares of Logica. Warburg Dillon Read and Close Brothers have underwritten
the placing, and Warburg Dillon Read is broker to the placing.

The net proceeds of the placing will be used to finance the £15 million cash component of
the proposed acquisition of Team 121 and to refinance debt incurred from five recent
acquisitions which together totalled £86.5 million. The placing is not conditional on
completion of the acquisition of Team 121.

NOTE TO EDITORS:

ERP (enterprise resource planning) is the umbrella term for packaged integrated business
systems. The market for client/server ERP packages has experienced rapid growth and these
packages are now used in most of the world’s largest companies. SAP AG is currently
estimated to have around 30 per cent of the global ERP market.

Founded in 1969, Logica plc is a leading international computer consultancy, systems
integration and software company. Logica's clients operate across diverse markets including
finance, telecommunications, energy and utilities, industry, government, defence, transport
and space. Logica has over 8,000 staff in 23 countries worldwide.

This announcement is published on behalf of Logica and Team 121, is the sole responsibility
of Logica (except in relation to information relating solely to Team 121, its directors and
persons connected with them) and Team 121 (in relation to information relating solely to
Team 121, its directors and persons connected with them) and has been approved by
Warburg Dillon Read and Close Brothers Corporate Finance Limited solely for the purposes
of section 57 of the Financial Services Act 1986.

Close Brothers Corporate Finance Limited, which is regulated in the UK by The Securities and
Futures Authority Limited, is acting for Logica and no one else in connection with the Offer
and the share placing and will not be responsible to anyone other than Logica for providing
the protections afforded to customers of Close Brothers, nor for providing advice in relation
to the Offer and the share placing.

Warburg Dillon Read, the investment banking division of UBS AG, which is regulated in the
UK by The Securities and Futures Authority Limited, is acting for Logica and no one else in
connection with the share placing and will not be responsible to anyone other than Logica
for providing the protections afforded to customers of Warburg Dillon Read, nor for
providing advice in relation to the share placing.

The shares of the Company are not being registered under the US Securities Act of 1933, as
amended (the Securities Act) and may not be offered or sold in the United States or to or for
the account or benefit of US persons (as such terms are defined in Regulation S under the
Securities Act) except pursuant to an exemption from such registration

This announcement does not constitute an offer or an invitation to purchase any securities.


Copies of this announcement are not being, and must not be, mailed or otherwise
distributed or sent in or into the United States, Canada or Japan and persons receiving this
announcement (including custodians, nominees and trustees) must not distribute or send it
into or from the United States, Canada or Japan.

Logica buys Team121

Recommended

Recommended

More Related Content

Similar to Logica buys Team121

Similar to Logica buys Team121 (20)

Logica buys Team121