Shares in Maddox Group Plc have risen a quarter to stand at 7.75 pence with the confirmation that it is to sell its two electrical wire and cable distributors Cables & Flexibles Ltd and Seacoast Electric Company Inc, for $29.6m, to a US management buy-out team. The move, Maddox says, will enable it to concentrate […]
Shares in Maddox Group Plc have risen a quarter to stand at 7.75 pence with the confirmation that it is to sell its two electrical wire and cable distributors Cables & Flexibles Ltd and Seacoast Electric Company Inc, for $29.6m, to a US management buy-out team. The move, Maddox says, will enable it to concentrate on its personal computer network maintenance service. It is aiming to provide what it describes as a streamlined service to large UK-based companies using either IBM or Compaq personal computers. The company, headquartered in London, was formed in February 1992 by entrepreneur Hugo Biermann. It bought into the contract-maintenance market this August with the acquisition of the Wakebourne Group in Feltham and its systems and maintenance arm, Express Computers. Thought to be next on its list of prospective purchases is First Point formerly Touchstone – the computer maintenance arm of London EC2-based Stratagem Ltd. Predictably, shares in Stratagem rocketed skyward following the Maddox announcement but a deal is yet to be confirmed. Maddox is also interested in other small service companies across the UK as it is eager to maintain the kind of geographic spread demanded by its clients, most of which have branches nationwide. Its estimated customer base at present is somewhere between 300 and 500. Under the terms of the new disposal agreement, Maddox is taking up around $19m worth of preference shares and loan notes. Its $500,000 loan notes are convertible into a 49% stake in the main buy-out vehicle, Lantek Electronics Inc. A further $7.6m will be used to repay company debts. The move will cut Maddox’s staff to around 150 from 350. Meantime Lantek, headed by former Seacoast employee Michael Worfolk, will concentrate on distributing computer network components in Europe and the US. Its takeover of Cables & Flexibles and Seacoast is expected to be completed by the end of February. This is likely to be followed, it is rumoured, by the acquisition of New Hampshire-based networking agent and equipment distributor Yankee Electronics. In the five months to September 30, Greenford-based Cables & Flexibles made a pre-tax loss of UKP277,000; the company is now said to be back in profit however. New York-based Seacoast made $893,000 pre-tax profits for the nine months to September 30.