News

June 17, 2005

REG-Roxboro Group PLC Proposed Disposal of Mobrey

Date/Range:  17-JUN-2005

Short Abstract: REG-Roxboro Group PLC Proposed Disposal of Mobrey

 

FOR RELEASE AT 7.00 A.M. ON FRIDAY 17 JUNE 2005

THE ROXBORO GROUP PLC

PROPOSED DISPOSAL OF MOBREY

The Roxboro Group PLC, the international specialist electronics group, announces
the proposed disposal of Mobrey, its process measurement and control equipment
business, to Emerson.

Highlights:

– Disposal of Mobrey to Emerson for £26.0 million payable in cash by Emerson
at Completion
– Profit after expenses and taxation on the Disposal of approximately £2.4
million on a pro forma basis
– Mobrey is active in the design and manufacture of process measurement and
control equipment and offers a single-source supply for an extensive range
of level, flow, pressure density, viscosity, suspended solid and data
acquisition measurement devices
– The Board has concluded that Mobrey’s technology and market positions
would benefit from being part of a larger global group focused on the
process instrumentation sector. Consequently, the Board initiated a process
which has culminated in the recommended Disposal
– The Disposal does not include the trade and assets of the Analytical
Product Line which are being retained by Roxboro within the Continuing
Solartron Group
– The Disposal is conditional, inter alia, on the approval of Roxboro’s
Ordinary Shareholders which will be sought at an EGM to be held in July 2005
– Following Completion, the Board will continue to review the Continuing
Group’s capital requirements with a view to proposing a return of cash to
Ordinary Shareholders within a reasonable period. The Board will make
further announcements with its proposals when appropriate

Commenting on the Disposal, Harry Tee, Roxboro’s Chief Executive, said:

“I am very pleased to be announcing this disposal today as it forms part of the
Group strategy of becoming more focused and of generating shareholder value.
Mobrey is a high quality business producing “best-of-breed” products but its
further development would be best served as part of a larger global group.
Roxboro will now comprise the retained Solartron high-margin businesses, focused
on niche measurement sectors, together with Dialight, our growing electronic
lighting division.

Dialight has exciting potential and performed well in 2004 with operating
profits increasing five-fold. Solid state lighting has many clear advantages
over traditional lighting and as such the number of applications and demand for
advanced solid state lighting products is expected to continue to show good
growth.”

Roxboro

Harry Tee                                  01480 447 490

Alf Vaisey                                 01480 447 490

Close Brothers

Andrew Cunningham                          020 7655 3100

Shane Lawlor                               020 7655 3100

gcg hudson sandler

Alistair Mackinnon-Musson                  020 7796 4133

Philip Dennis                              020 7796 4133

E-mail:                                    Roxboro@hspr.co.uk

A circular (the “Circular”) containing further details relating to the Disposal
and the convening of the EGM will be sent to Shareholders shortly.

Close Brothers Corporate Finance Limited, which is regulated in the United
Kingdom by The Financial Services Authority, is acting exclusively for The
Roxboro Group PLC and for no one else in relation to the Disposal and will not
be responsible to anyone other than The Roxboro Group PLC for providing the
protections afforded to clients of Close Brothers Corporate Finance Limited or
for providing advice in relation to the Disposal or on any matter referred to
herein.

FOR RELEASE AT 7.00 A.M. ON FRIDAY 17 JUNE 2005

THE ROXBORO GROUP PLC

PROPOSED DISPOSAL OF MOBREY

Introduction

The Board of Roxboro announces that it has entered into a conditional agreement
to sell Mobrey, a business unit of Roxboro’s Solartron division focused on the
process instrumentation sector, to Emerson for £26.0 million, subject to
Adjustments, payable in cash on Completion. Roxboro will retain Solartron
Metrology and Solartron ISA as well as the Analytical Product Line which is not
included in the Disposal and has been extracted from Mobrey.

Due to the size of the transaction, the Disposal is conditional, amongst other
things, on the approval of Ordinary Shareholders which is to be sought at an
Extraordinary General Meeting to be held in July 2005.

Background to, and reasons for, the Disposal

Following the disposal of Roxboro’s aerospace sensors business, Weston
Aerospace, in 2003, the Board has continued to review how additional shareholder
value in Roxboro could be generated. As a result Roxboro has continued to
develop a strategy more focused on niche, high growth opportunities and the
Board has concluded that Mobrey’s technology and market positions would benefit
from being part of a larger global group focused on the process instrumentation
sector. Consequently, the Board initiated a process which has culminated in the
Disposal, the terms of which the Board is recommending to Ordinary Shareholders.

Information on the Mobrey Business

Mobrey is active in the design and manufacture of process measurement and
control equipment. Mobrey offers a single-source supply for an extensive range
of level, flow, pressure density, viscosity, suspended solid and data
acquisition measurement devices.

Mobrey’s products provide continuous precision monitoring technology to process
industries world-wide, including applications in nuclear and fossil fuel power
generation plants, oil and gas production and refining, water and waste
treatment and the chemicals, pharmaceuticals and food industries.

Historically, the Mobrey Companies contained both Mobrey and the Analytical
Product Line for financial information and operational purposes. Analytical will
remain with the Roxboro Group as part of the Continuing Solartron Group and has
been transferred out of the Mobrey Companies under the Analytical Transfer
Documents. In the financial year ended 31 December 2004, the Mobrey Companies
generated gross profit of £16.2 million and operating profit of £3.3 million on
turnover of £47.5 million. As at 31 December 2004, the net assets of the Mobrey
Companies were £4.9 million. Included within these financial results is turnover
of £8.5 million and gross profit of £3.7 million relating to the Analytical
Product Line. As a result of Analytical being a product line within the Mobrey
Companies, appropriate financial information to present an analysis of the
operating profit of Analytical is not available; however, overhead costs
directly attributable to the Analytical Product Line of £1.6 million have been
identified for the financial year ended 31 December 2004. The net assets of
Analytical as at 31 December 2004, included within the Mobrey Companies, were
£9.6 million.

Information on Emerson

Emerson is a diversified global technology company which designs and supplies
product technology and delivers engineering services to a wide range of
industrial, commercial and consumer markets around the world. Operations include
the manufacture of electrical, electromechanical, and electronic products, many
of which are used to control gases, liquids, and electricity.

Emerson has more than 60 divisions that operate approximately 245 manufacturing
locations worldwide and market products in over 150 countries. Emerson employs
approximately 107,800 people around the world and had revenues of approximately
US$15.6 billion in the financial year ended 30 September 2004.

Principal terms and conditions of the Disposal

Under the terms of the Agreement, the aggregate consideration for the Disposal
of £26.0 million is payable in cash, subject to Adjustments. The Agreement
contains certain warranties and indemnities given by Roxboro and Roxboro
Holdings Inc. to the Purchaser which the Board considers to be appropriate for a
transaction of this type.

The Disposal is conditional upon Roxboro obtaining the approval of its Ordinary
Shareholders at the Extraordinary General Meeting and a mandatory regulatory
competition clearance in Germany. Completion is expected to occur on the same
date as (or shortly after) Ordinary Shareholder approval has been obtained.

Financial effects of the Disposal and use of proceeds

The proceeds of the Disposal before expenses and taxation are expected to be
£26.0 million before Adjustments. The net proceeds of the Disposal before
Adjustments but after expenses and taxation are expected to be £20.5 million.
Based on Mobrey’s net assets (excluding intra-Group balances) of £9.1 million as
at 31 December 2004 and after the charging of goodwill contained in the Roxboro
Group balance sheet of £9.0 million, the Disposal would result in a profit after
expenses and taxation of approximately £2.4 million on a pro forma basis.

Following Completion, the net proceeds of the Disposal will be held on deposit,
as an interim measure, whilst the Board reviews the Continuing Group’s capital
requirements with a view to proposing a return of cash to Ordinary Shareholders
within a reasonable period. The Board will make further announcements with its
proposals when appropriate.

On a pro forma basis and after taking account of the Disposal and the Analytical
Transfer Documents, the Continuing Group’s net cash position at 31 December 2004
was £27.3 million.

Current trading and prospects of the Continuing Group

At the Annual General Meeting of Roxboro on 10 May 2005 it was reported there
had been no significant change in the markets serviced by the Group since the
preliminary results announcement in March 2005. This remains the case.

Although a number of projects within the oil and gas sector previously
anticipated for the first half are now expected to be secured in the second half
of the year, the order book for the Continuing Solartron Group has strengthened
since the beginning of the year.

The electronics sector weakened in the second half of last year and although
some improvement has been experienced in the first half of the current year,
volumes in Dialight’s optoelectronic product line have not reached the first
half levels of last year; however, the prospects for Dialight remain encouraging
as demand for solid state lighting products is expected to continue to show good
growth.

Overall the Board views the prospects of the Continuing Group with confidence as
it pursues its strategy focused on niche high growth opportunities and
generating shareholder value.

Circular to Shareholders

The Circular convening the Extraordinary General Meeting will be posted to
Shareholders shortly.

DEFINITIONS

The following definitions apply throughout this announcement:

“Adjustments”                           the adjustments to the purchase price of the Mobrey Companies for net
cash, tax liabilities in the period to Completion and working capital
to be made pursuant to the Agreement;

“Agreement”                             the conditional share sale and purchase agreement relating to the
Disposal dated 16 June 2005 between Roxboro, Roxboro Holdings Inc.
and the Purchaser;

“Analytical” or “Analytical Product     a product line formerly contained within the Mobrey Companies, the
Line”                                   trade and assets of which were transferred out of the Mobrey
Companies in advance of the Disposal under the Analytical Transfer
Documents;

“Analytical Transfer Documents”         the agreements entered into on 6 June 2005 and 16 June 2005
collectively effecting the transfer of the trade and assets of the
Analytical Product Line out of the Mobrey Companies;

“B Shares”                              redeemable, non-cumulative preference shares of 75p each in the
capital of Roxboro;

“Board” or “Directors”                  the directors of Roxboro;

“Close Brothers”                        Close Brothers Corporate Finance Limited;

“Completion”                            completion of the Disposal;

“Continuing Group”                      Roxboro and its subsidiary undertakings following Completion;

“Continuing Solartron Group”            the remaining Solartron Group after the Disposal comprising the
Solartron Metrology and Solartron ISA businesses as well as the
Analytical Product Line;

“Dialight”                              Roxboro’s solid state lighting business;

“Disposal”                              the proposed disposal of the Mobrey Companies on the terms set out in
the Agreement;
“Emerson”                               Emerson Electric Company, Inc.;

“EGM” or “Extraordinary                 the extraordinary general meeting of the Company to be held in July
General Meeting”                        2005 (or any adjournment thereof);

“FSMA”                                  Financial Services and Markets Act 2000 (as amended);

“Mobrey” or “Mobrey Business”           the business undertaken by the Mobrey Companies following the
disposal of the Analytical Product Line pursuant to the Analytical
Transfer Documents;

“Mobrey Companies”                      Solartron Group PLC and Solartron Inc. and their respective
subsidiaries;

“Ordinary Shares”                      ordinary shares of 1.89p each in the share capital of Roxboro;

“Ordinary Shareholders”                 the holders of Ordinary Shares;

“Purchaser”                             Emerson Holding Company Limited, a wholly owned subsidiary of
Emerson;
“Resolution”                            the ordinary resolution to be proposed at the EGM;

“Roxboro” or the “Company”             The Roxboro Group PLC;

“Roxboro Group” or “Group”              Roxboro and its subsidiaries;

“Shareholders”                          the holders of Ordinary Shares and the holders of B Shares;

“Solartron” or “Solartron Group”        the Solartron group of companies before the Disposal comprising the
Solartron Metrology and Solartron ISA businesses, the Mobrey Business
and the Analytical Product Line;

“Solartron ISA”                         Solartron’s business involved in the design and supply of
flow-metering products and solutions for the oil and gas market;

“Solartron Metrology”                   Solartron’s business involved in the design and supply of gauging and
position measurement sensors;

“UKLA”                                  the Financial Services Authority acting in its capacity as the
competent authority for the purposes of Part VI of FSMA.

This information is provided by RNS
The company news service from the London Stock Exchange