AAV UPDATE ON EVENTS BUSINESS ACQUISITIONS Following on from the announcements on 23 June and 13 July 2006, AAV Limited provides the following update on its Events Services business’ strategic acquisitions and the expansion of its creative services capability: Exhibitions and Trade Fairs Pty Limited (“ETF”) Legal agreements for the acquisition of the Exhibitions and Trade Fairs were signed last evening with completion scheduled for 1 September 2006. The CEO of AAV Limited Michael Gardner commented “everything is on track for completion of the acquisition of ETF at the commencement of September 2006. Securing this business will expand our Events Services operations bringing into our service offering a number of trade shows and consumer exhibitions held annually, biennially and triennially as well as bringing to us experienced staff who can further enhance the existing Events Services business. “The annual revenue and earnings stream for ETF can vary considerably over a three year period due to the cycle of the various exhibition events as described above, however from the date of acquisition by AAV, in the 2006/7 financial year, ETF will contribute revenues of some $12.0 million and an expected EBIT of $2.75 million to our business. As previously announced, the acquisition will be EPS positive from day one, bringing an expected increase in EPS for 2006/7 of 2.0 cents per share. AAV paid $13.1 million for the business out of current cash reserves, payable $12.1 upon completion and a further $1.0 million subject to agreed future achievements. “I am very pleased that ETF is amongst the first of our acquisitions to be completed. It is a very good business run by excellent people. The synergies between the businesses will create greater returns for shareholders and help further secure Staging Connections leading market position.” said Mr Gardner. Stageworks Pty Limited Mr Gardner commented “We are very excited to have completed the acquisition of Stageworks in far North Queensland following final due diligence and documentation. Closing on Stageworks demonstrates our commitment to strategically grow our Events Services Business, Staging Connections, through targeted acquisitions where we see opportunities. Stageworks will enable us to provide a seamless service offering capability in the Queensland and offshore island region. The proposed acquisition will be earnings accretive from day one. “Stageworks is the leading and largest events and staging operator in that region and we are looking forward to developing its capabilities further and to working with its highly capable and talented staff. “Stageworks will contribute revenues of some $3.0 million in the 2006/7 financial year and an expected EBIT of $700,000 for the year. As previously announced, the acquisition will be EPS positive from commencement, bringing an expected increase in EPS for 2006/7 of 0.21 cents per share. AAV has paid $2.8 million for the purchase of the business sourced from available cash resources. An initial cash payment of $2.1 million was paid upon closing and the balance of $700,000 is due on the first anniversary of completion, subject to the achievement of certain earnings targets by the business.” said Mr Gardner. Creative Services - Paul Kenny to join Staging Connections In a further move to expand its service offering, Mr Gardner announced today that AAV’s Events Services business, Staging Connections, has engaged the services of one of Australia’s most respected and experienced creative designers, Paul Kenny. “In addition to acquiring strategic businesses, we have also been on the look-out for key people who can join with us to bring a total service offering to the clients of our Events Services business. We are excited that Paul Kenny, regarded as one of Australia’s most pre-eminent creative events designers, has agreed to join us. Paul recently stepped down as Australian Chairman of one of the world’s leading events groups, and has played a pivotal role in the development of numerous major global events. These include the ceremony for the Melbourne 2006 Commonwealth Games as well as a number of other major events for key clients world wide. Paul will work with the MD of Staging Connections, Bill Davidson and be responsible for leading the creative direction of the business both locally and internationally.” said Mr Gardner. Global events expansion AAV continues to monitor and review Australian/New Zealand Event Services business opportunities to ensure that it provides a leading edge total service to its clients. In addition to these initiatives, due diligence is well underway in two opportunities in SE Asia and another in the Middle East. “We are excited by the potential for Staging Connections and these businesses to form core regional bases as we build on the global business case we implemented with the opening of Beijing and Shanghai operations earlier this year. We have yet to finalise due diligence and have not yet reached final agreement for the acquisition of these businesses. AAV will make appropriate announcements when these have been concluded.” said Mr Gardner.
AVV Price at posting:
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