Sanderson Acquires Yorkshire Software Firm

Sanderson Group has acquired Progressive Computer Systems (Progressive), for a maximum consideration of GBP 1.75 million.

Sanderson Group has acquired Progressive Computer Systems (Progressive), for a maximum consideration of GBP 1.75 million.

It is the first acquisition by Sanderson since its flotation on the UK's AIM market in December 2004.

Based in Batley, West Yorkshire (UK) Progressive is a provider of browser-based software under the Eorganiser brand.

Progressive, which is owned by Robert Davison was founded in 1995 and currently employs 22 people.

Subsequent to the acquisition, Davison will continue as managing director.

The acquisition complements the position of Sanderson in its UK target markets and provides Progressive with the strength of the Sanderson brand to develop new business opportunities, said Sanderson.

The total initial consideration for the acquisition is GBP 750,000 in cash plus the issue of 375,000 ordinary shares of 10p nominal value each in the capital of Sanderson.

Those 'consideration shares' are valued at GBP 245,625 based on the average closing mid-market price of 65.5p over the 10 business days preceding July 7.

The consideration shares will be subject to a 12-month period during which they may only be disposed of with the prior consent of Sanderson.

An application has been made to the London Stock Exchange for the consideration shares to be admitted to AIM.

Up to GBP 750,000 of additional cash consideration may be payable, dependent upon the achievement of certain performance targets related to the results of Progressive for a period ending not later than October 31 2007.

In the 12 months to October 31 2004, Progressive achieved a turnover of GBP 1.37million (compared to GBP 951,000 in 2003) and earnings before interest and tax of GBP 176,000 (2003: GBP 6,000).

It had gross assets of GBP 549,000 at October 31 2004.

Sanderson expects the acquisition to be earnings enhancing in the financial year ending September 30 2006, the first year in which Progressive will contribute a full year's results.

Commenting on the acquisition, Christopher Winn, Sanderson's chairman, said: "We are delighted to welcome Progressive to the Sanderson Group.

As our first acquisition since flotation on AIM in December 2004, Progressive demonstrates our buy and build strategy, providing the group with new revenue streams and market opportunities.

We are confident that Progressive will provide a significant contribution to the group in the years to come.".

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