SGH Satcom Grp

RNS Number:7125R
SatCom Group Holdings plc
26 September 2005



Press Release                                           26 September 2005



    SatCom expands in Asia with acquisition of Horizon Mobile Communications

Introduction

SatCom Group Holdings plc ("SatCom" or "the Group"), a reseller of mobile
satellite communications, announces that it has today entered an agreement
("Acquisition Agreement") to acquire Horizon Mobile Communications Co., Ltd.,
("HMC") a dedicated supplier of mobile satellite communications and integrated
IT solutions predominantly to the Asian maritime market. The initial
consideration is US$3.77 million, of which US$3.06 million is to be paid in cash
and the balance is to be satisfied by the issue of new ordinary shares of US$
0.10 each in the capital of SatCom ("New SatCom Shares").

Additional deferred consideration may be payable in two instalments based on
HMC's future performance, up to a maximum of US$1.86 million.

This is the first acquisition by SatCom since joining AIM in July 2005 and meets
one of it's strategic objectives of expanding into the commercial shipping
market. The acquisition is immediately earnings enhancing for SatCom. This
statement should not be interpreted to mean that SatCom's future earnings per
share will necessarily be greater than its historic published earnings per
share.

HMC's staff and management will continue to operate the company and service its
customers. SatCom and HMC envisage opportunities for cost savings and cross
selling following completion of the acquisition.

Background to HMC

Headquartered in Bangkok, Thailand with its main sales office in Singapore, HMC
also has offices in Hong Kong, Japan and Australia. HMC's customer base is made
up largely of shipping fleets to which it offers mobile satellite communications
and integrated IT solutions as well as value added services, including HMC mail,
fleet management and fleet management operations.

During the year ended 31 December 2004 HMC's turnover was US$8.75 million, gross
profit was US$ 2.95 million and profit before tax was US$281,000. As at 31
December 2004 it's net assets stood at US$2.35 million.

Terms of the Acquisition Agreement

The Acquisition Agreement provides for the acquisition by SatCom from a small
group of vendors of shares in HMC ("HMC Shares") completion of which is expected
to occur on or around 29 September 2005.

Under the Acquisition Agreement, vendors holding approximately 52.1 per cent. of
the HMC Shares have elected to be paid a single payment on completion in cash
of, in aggregate US$2.34 million and vendors holding approximately 47.9 per
cent. of the HMC Shares have elected to be paid on the basis of an initial
payment on completion of, in aggregate US$1.43 million plus two further
instalments ("Earn-out") dependent upon the future performance of HMC.

The first tranche of the deferred payment will be payable in March 2006 provided
the gross profit for the year ending 31 December 2005 exceeds US$3.275 million.
The maximum aggregate amount payable will be US$0.86 million if the gross profit
for that year is equal to or greater than US$3.725 million. The actual payment
will vary in proportion between the upper and lower gross profit limits.

The second tranche of the deferred payment will be payable in March 2007
provided the gross profit for the year ending 31 December 2006 exceeds US$1.31
million. The maximum aggregate amount payable will be US$1.0 million if the
gross profit for that year is equal to or greater than US$3.9 million. The
actual payment will vary in proportion between the upper and lower gross profit
limits.

Under the Earn-out both the initial payment and the deferred payments are
determined on the basis of 50 per cent. in cash and 50 per cent. by the issue of
New SatCom Shares. The value of the New SatCom Shares will be calculated at the
GBP/US$ exchange rate prevailing three business days prior to the payment date
and at a price of 5 per cent. less than the average closing mid-market price on
the previous 30 days prior to the third business day before each payment subject
to a minimum price of 30p per New SatCom Share.

The New SatCom Shares shall rank pari passu in all respects with the existing
ordinary shares in SatCom. The New SatCom shares will be issued in registered
form and will be eligible for settlement in CREST.

In addition to the consideration payable to the vendors, SatCom has agreed to
make a payment to the Chairman of HMC, who will resign as Chairman on completion
but will continue as a non-executive director of the company. The payment is in
respect of the cancellation of contractual rights and a transaction fee. The
total payment is US$300,000 payable on completion, of which US$150,000 is to be
paid in cash and the balance is to be satisfied by the issue of New SatCom
Shares. The value of the New SatCom Shares will be determined on the same basis
as for those vendors electing for the Earn-out.

SatCom has also agreed to make a payment in cash on completion of US$100,000 to
the management team of HMC in connection with existing commitments by HMC.

Each of the vendors electing to take the Earn-Out has agreed not to dispose of
any New SatCom Shares issued to them for a period of 6 months from the date of
issue, except in certain circumstances, and have given certain undertakings
relating to preserving an orderly market in SatCom's shares for a further period
of 6 months.


Mark White founder and Chief Executive of SatCom said: "This is an exciting deal
for SatCom. With more than 20 years of combined maritime and communications
experience, HMC was our first choice for mobile satellite communications
throughout Asia. The deal opens up the growing Asian market to SatCom and
further gives us the opportunity to enter the marine sector in our other
territories - a sector we have identified as an area of potential significant
growth."


- Ends -

For further information:

SatCom Group Holdings plc
Mark White, Chief Executive Officer            Tel: +44 (0) 1722 439 206
mark.white@satcomgroup.com                     www.SatComgroup.com
----------------------------                   ----------------------

Martin Ward, Chief Financial Officer           Tel: +44 (0) 1722 439 201
martin.ward@satcomgroup.com                    www.SatComgroup.com
-----------------------------                  ----------------------

Ernst & Young LLP
John Stephan,                                  Tel: +44 (0) 207 951 2000
jstephan@uk.ey.com
---------------------

Teather & Greenwood Limited
Stephen Austin, Corporate Finance             Tel: +44 (0) 207 426 9000
stephen.austin@teathers.com                   www.teathers.com
------------------------------                -------------------

Media enquiries:
Abchurch
Heather Salmond / Dana Thomas                  Tel: +44 (0) 20 7398 7700
heather.salmond@abchurch-group.com             www.abchurch-group.com
-------------------------------------          -------------------------


Notes to Editors

SatCom is a global reseller of airtime services and satellite systems hardware
(mobile handsets) for major satellite systems operators, including Inmarsat,
Thuraya and Iridium. SatCom's key target markets include the US, Europe, Asia
and Middle East.

SatCom is based in Salisbury in the UK, with further offices in New York,
Washington and Hong Kong. SatCom has established a robust customer base of over
7,500 active terminals and is able to offer all communication solutions
including voice, fax and data. SatCom, through its subsidiary O'Gara Satellite
Systems Inc, has also established itself as one of five preferred suppliers to
the US Government.

Products range from small, handheld phones through to terminals such as the
Inmarsat Regional B-GAN, a high speed satellite Internet Protocol modem
operating at speeds of more than twice the speed of the GPRS terrestrial system.
In addition, SatCom provides airtime services via the three satellite operators
to key customers including dealers, commercial companies and Governments.

The handsets are used with a SIM card that is registered by the end user at
www.simreg.com. This website is proprietary to SatCom, allowing SatCom to
register terminals and for customers to purchase prepaid airtime online.

SatCom has enjoyed strong increases in sales and profitability through organic
growth and acquisition. SatCom acquired a US airtime company O'Gara Satellite
Systems in 2002, which currently contributes nearly 30% of the Group's turnover.
In November 2004 SatCom successfully acquired Northstar Communications, Inc. The
Group recently reported an EBITDA of $3.0 million and a profit before tax of
US$2.6 million on $47.9 million of revenues for the financial year ended 30 June
2005.

Iridium is the only operator to offer a fully global, mobile satellite system,
providing voice and data solutions via a network of 66 low earth orbit ("LEO")
satellites built by Boeing. The Iridium service is delivered to and from remote
areas so is ideally suited for industrial applications such as heavy
construction, defence, maritime, oil and gas and aviation.

Thuraya offers cost effective satellite services to nearly one third of the
globe. Thuraya's satellite operations cover Europe, the Middle East, North
Africa and the Indian subcontinent and operate via a geo-stationary satellite
system. The Thuraya system includes a second satellite launched in early 2003
and a third satellite is planned in order to expand system capacity even
further.

Inmarsat was the world's first global mobile satellite communications operator
and is still the only one to offer a mature range of modern communications
services to maritime, land-mobile, aeronautical and other users. It operates a
constellation of geo-stationary satellites designed to extend phone, fax and
data communications all over the world.




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

END
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