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The Harvey Nash Group ('Harvey Nash') announces that it has taken an equity
stake in TechDiscovery LLP ('TechDiscovery') which expands and formalises the
successful existing strategic partnership.
The two organisations have worked together closely since 2006 and have forged a mutually beneficial strategic alliance providing joint IT Solutions and Consulting to shared clients across
the USA. TechDiscovery specialises in business-focused IT solutions, including
development, deployment, integration and maintenance of applications for Fortune
500 companies with whom the organisation has developed very strong
relationships.
The merged partnership will extend a full range of IT technology solutions to
clients, building on the Harvey Nash capability in both onshore and offshore
software development and business process outsourcing. They are already working
together to provide fully outsourced application management and technology
consulting services.
Under the expanded strategic alliance, Harvey Nash will acquire 49.9% (on a
fully diluted basis) of TechDiscovery LLP and under the agreement acquires an
option to purchase the remaining 50.1% within the following 3 years at the
Group's sole discretion. The initial consideration of £0.7million will be
payable in cash with an anticipated deferred element of £1.0 million in cash or
shares at Harvey Nash's discretion, subject to certain performance criteria
being achieved in the 12 months to 30 September 2008. This equity purchase is
capped at £2.5 million.
In the year ended 30 September 2007 TechDiscovery's un-audited revenues were
£3.3 million with a net income of £0.3 million. As at 30 September 2007 Tech
Discovery had net assets of £0.2 million. In the event that Harvey Nash
exercises its option to purchase the remaining 50.1%, consideration will be
payable based on increased profit targets over a further 2 year period.
Consideration will be by way of cash or shares at Harvey Nash's discretion and
the maximum consideration in the event the option is exercised is capped at £4.2
million.
Albert Ellis CEO of Harvey Nash said:
'I am delighted we have been in a position to take our IT Solutions partnership
to the next level. CIO's are saying that, in the future, delivering IT will
demand an increasingly creative and strategic approach, unlike the traditional
staffing model adopted by the industry. We firmly believe this expanded
relationship will provide a unique package of IT Solutions expertise for our
clients and ultimately enable the development of their competitive advantage.'
5 November 2007
