VELO Velosi

    RNS Number : 7020G
  Velosi Limited
  27 October 2008
   




    27 October 2008



    Velosi announces acquisition 
    of a MajoRIty stake in PSC italy


    Velosi Limited ("Velosi" or the "Group"), a provider of asset integrity and HSE services to a number of major national and multinational
oil and gas companies, is pleased to announce it has agreed to acquire a 60% stake in PSC Europe SRL ('PSC Italy') for an aggregate
consideration of EUR1.8 million. The acquisition will give Velosi a strong platform with which to expand its presence in Italy's rapidly
expanding natural gas market and the opportunity to offer the skills of PSC Italy's expert local team as part of the Group's broader service
offering.  

    Established in February 2002 PSC Italy is a successful business with strong client relationships amongst the major oil and gas
operators. Headquartered in Dalmine, Italy its core business is in expediting and inspection as well as providing a range of other services
including: consultation, supplier evaluation & ISO 9000 Audits, projects handling and follow-up. For the year ended 31st December 2007 PSC
Italy generated audited revenues of EUR6.5 million and pre-tax profit of EUR0.7 million. As at 31st December 2007, Italy PSC had net assets
of EUR0.4 million.

    Natural gas is fast becoming the emerging fuel of Italy, with 70 billion cm of natural gas currently consumed per year. PSC Italy is
well positioned within this market with a particular focus on the engineering and procurement phases. It is expected that PSC Italy's local
market knowledge, combined with Velosi's existing presence in the natural gas market, and wider experience and expertise, will significantly
enhance Velosi's ability to gain market share in this substantial marketplace. 

    The consideration is to be satisfied by an initial payment of EUR0.9 million in cash and a further deferred consideration of up to
EUR0.9 million to be paid on the basis of the business performance in the period from 1st January 2008 to 31st December 2010, in either cash
or shares.

    In addition, there are two call and put options over the remaining 40% interest in PSC Italy. The first option is exercisable for six
months post 31 December 2010 for up to 50% of the balance of the vendors' shares. The second option is exercisable for twelve months,
commencing five years from the date of acquisition, for the remaining shares. The option price will be settled in cash and will be based on
a pro-rata percentage of a multiple of six times the average audited profit after tax and minority interests of PSC Italy for the 3 years
preceding the exercise of the respective call or put option. 
    Commenting on the acquisition Dr. Nabil Abdul Jalil, CEO of Velosi said: "Given the signifcant opportunities in the natural gas market,
Italy has for some time been a market which Velosi has been looking to enter. We believe the local knowledge and market presence of PSC
Italy combined with the Group's broader international expertise will create a strong platform from which to win new contracts."

    The acquisition is in line with our model of taking majority stakes in successful profitable business in markets where the Group does
not currently have a physical presence. Importantly, the PSC Italy management team will retain a significant shareholding in the ongoing
business and we look forward to working closely with them to develop the opportunity."


    - END -

    For further information

 Velosi                      Dr Nabil Abdul Jalil             020 7930 0777
                             Joe Vincent
 Strand Partners             James Harris                     020 7409 3494

 Charles Stanley Securities  Mark Taylor                      020 7149 6000
                             Freddy Crossley
 Cardew Group                Tim Robertson                    020 7930 0777 
                             Shan Shan Willenbrock
                             Catherine Maitland


    Notes to editors:

    About the Velosi Group
    The Velosi Group, founded in 1982, provides asset integrity and HSE services to a number of leading national and multinational oil and
gas companies, including BP, Shell, ExxonMobil and Chevron. The Velosi Group operates globally through four principal offices in the USA,
the UK, Malaysia and the UAE and has operational or representative offices in a further 27 countries worldwide. Velosi joined the AIM market
on 21 August 2006. For more information, visit www.velosi.com. 


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