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Eurica takes off
00:00 18 Nov 1998
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Interior Services Group (ISG) has signed up a three-man team whose
challenge is to set up a facilities management business within the
group. Trading as Eurica, they will have the go-ahead from ISG to
spend up to £15 million on a suitable purchase.
ISG will hold 76 per cent of the shares in Eurica with the management team holding the balance of 24 per cent. Eurica's team is Julian Squire, David Miller and Fred Guscott.
David King, chairman and chief executive of ISG, said this week: "At our last interim results we said we were headhunting. It turns out that these three also were heading towards the formation of a similar business with venture capital backing.
"We have got a management team in one swoop. We are now prepared to spend up to £15 million to get a sizeable FM business - we are looking for a business with a broad spectrum of activities."
The ISG group strategy is one of Total Office Services Provision, looking after the occupiers of property throughout all of the three phases of the occupancy life cycle. Eurica will complement ISG's existing businesses Exterior and Interior which already serve the first two phases.
In the 12 months to 30 June 1998, ISG's turnover of £208 million (£137 million) generated a pre-tax profit of £2.9 million (£2.3 million). The group's broker is forecasting a profit figure of £3.7 million next time around.
ISG is investing £152,000 in Eurica as share capital, plus a £456,000 loan for use as working capital. The Eurica team's input will be a £48,000 cash contribution plus working capital of £144,000.
The deal allows ISG to acquire the minority interest of the Eurica team at some time within a five-year period, the acquisition price being related to the audited profit of the future FM businesses and based on a formula linked to the market capitalisation of ISG.
The maximum amount payable can not be more than 24 per cent of the value of the enlarged group following acquisition of the minority. "This arrangement incentivises them to grow the business," said King.
Squire, chief executive of Eurica, will join the board of ISG. Miller and Guscott headed a management buy-out of Allied Dunbar's property and facilities management division, which established FM2, later sold to Honeywell
ISG will hold 76 per cent of the shares in Eurica with the management team holding the balance of 24 per cent. Eurica's team is Julian Squire, David Miller and Fred Guscott.
David King, chairman and chief executive of ISG, said this week: "At our last interim results we said we were headhunting. It turns out that these three also were heading towards the formation of a similar business with venture capital backing.
"We have got a management team in one swoop. We are now prepared to spend up to £15 million to get a sizeable FM business - we are looking for a business with a broad spectrum of activities."
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The ISG group strategy is one of Total Office Services Provision, looking after the occupiers of property throughout all of the three phases of the occupancy life cycle. Eurica will complement ISG's existing businesses Exterior and Interior which already serve the first two phases.
In the 12 months to 30 June 1998, ISG's turnover of £208 million (£137 million) generated a pre-tax profit of £2.9 million (£2.3 million). The group's broker is forecasting a profit figure of £3.7 million next time around.
ISG is investing £152,000 in Eurica as share capital, plus a £456,000 loan for use as working capital. The Eurica team's input will be a £48,000 cash contribution plus working capital of £144,000.
The deal allows ISG to acquire the minority interest of the Eurica team at some time within a five-year period, the acquisition price being related to the audited profit of the future FM businesses and based on a formula linked to the market capitalisation of ISG.
The maximum amount payable can not be more than 24 per cent of the value of the enlarged group following acquisition of the minority. "This arrangement incentivises them to grow the business," said King.
Squire, chief executive of Eurica, will join the board of ISG. Miller and Guscott headed a management buy-out of Allied Dunbar's property and facilities management division, which established FM2, later sold to Honeywell
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