MercoPress. South Atlantic News Agency

Falkland Islands Holdings plc acquisition of Momart

Falkland Islands Holdings PLC (FIH) said it has acquired art logistics and storage company Momart International Ltd for £10.27 million, of which £ 7.78 million is payable in cash and the remaining through the issue of 582,666 shares.

The Board of Falkland Islands Holdings plc ("FIH" or the "Group"), the international services Group which owns essential services businesses focused on transport and logistics and which has a major shareholding in Falkland Oil and Gas ("FOGL"), announced Wednesday the acquisition of Momart International Ltd ("Momart"), the international art logistics and storage company, for £10.27m. Momart is being acquired from its management and employees for a mixture of cash, deferred consideration and shares in FIH. The acquisition is conditional on the admission of the new FIH shares to trading on AIM, which is expected to take place today (5 March 2008). Following the acquisition, Momart's key management and staff will continue to work within the Group to drive its continued expansion, particularly in rapidly growing overseas markets. It is expected that the acquisition will be significantly accretive to EPS post completion and further strengthens the Group's earnings base within the transport services sector. It also enhances FIH's overall growth prospects. Momart was established in 1971 and has grown steadily to become a globally-respected logistics group focused exclusively on the storage, transportation and installation of fine art, ranging from paintings, to sculptures, to complex installations, into, out of and within the United Kingdom. Momart has a highly trained workforce and a fleet of purpose built specialist vehicles operating from its modern 78,000 sq.ft. storage facility in East London. Momart enjoys an estimated 13% of a market estimated to be worth approximately £85m in the UK. The Company is a trusted partner of choice for major art institutions, galleries and artists in the UK and internationally. Clients include: UK InstitutionsThe Victoria and Albert Museum, The Royal Academy, The Tate Galleries, The National Gallery and The British Museum CollectionsThe Royal Collection, The Henry Moore Foundation, and The UBS Collection ArtistsDamien Hirst and Antony Gormley Overseas InstitutionsThe Metropolitan Museum of New York, The National Gallery of Art Washington, J PaulGetty Museum – Los Angeles, The Pompidou Centre – Paris and The Hermitage St. Petesburg Momart has a wide spread of clients, with no single customer accounting for more than 8% of turnover. Over 30 years Momart has developed a team of skilled craftsmen with a thorough knowledge and appreciation of the artefacts handled and it delivers a consultancy-led solution to organisers of major exhibitions and galleries, providing clients with the care and attention to detail they demand and helping them to accurately cost, plan and orchestrate the movement, collection and display of priceless works of art across the globe. Momart's audited accounts to 31 August 2007 showed turnover of £12.3 million, pre-tax profits of £1.2 million and net assets of £0.35 million. Profits for that year before bank interest and depreciation/amortisation were £1.65m. In the 10 year period to August 2007, helped by the steady growth in the global movement of art, Momart's turnover increased by over 90% (a compound annual growth rate of 7.9%) and in the five month period to 31 January 2008 sales have increased 9.8% over the comparable prior period. Deal StructureThe consideration comprises: £7.78m in cash and 582,666 new FIH shares. The cash is payable as follows: £4.61m payable on or shortly after completion, £1.55m payable on 15 January 2009 and £1.62m two years following completion in March 2010. The aggregate value of the consideration amounts to £10.269 million (based on the closing price of 427.5p of an FIH share on 3 March 2008). The deferred payments are supported by a bank guarantee and are subject to certain directors remaining with the business. The cash consideration payable on completion is being financed out of FIH's existing cash resources and a £4.0m term bank loan. Certain non-trading assets of Momart are also to be sold and the net proceeds paid to the vendors. The sale and purchase contract contains warranties and non competition covenants in favour of FIH. Following the allotment of new FIH shares to the vendors, FIH will have 9,052,876 ordinary shares of 10p each in issue. Application has been made to London Stock Exchange plc for the 582,666 new FIH shares to be admitted to trading on AIM. Seventy-five percent of the FIH shares being issued are subject to a 12 month lock-in. The vendors were advised by Livingstone Partners LLP.