VTL Group Limited Grows in Texas
VTL Group Limited Grows in Texas
Auckland, June 17, 2004 - VTL Group Limited (NZX: VTL) announced today that it had purchased the assets of American vending company Adolphs Vending Service Inc., based in Dallas, Texas for NZD$3,800,000. Adolphs has been operating profitably in the Dallas market for over 50 years.
Adolphs is a full line-vending operator, whose service offering includes drinks, snacks and coffee and currently employs 35 staff. The purchase includes equipment, inventory, cash float, benefit of business contracts, benefit of asset leases, benefit of supplier warranty, business records, intellectual property and goodwill.
VTL Group entered the due diligence process earlier this year and has completed a rigorous business review, including the assessment of the current vending machines for retro-fitting with VTL Group's leading-edge proprietary technology.
This acquisition is a strong strategic fit with VTL Group's international vending franchise system 24seven. VTL Group intends to recruit 24seven franchisees, as the technology retrofitting is rolled-out. The 24seven brand is also represented in California, USA as well as Australia and New Zealand.
USA Chief Operating Officer Peter Holt said "We had earlier identified Texas as the next state for expansion in USA, following California, due to the size, general economic growth and demographics. We then focused on identifying quality vending companies that were in line with our strategic plan and complementary to our 24seven business, that also offered strong site placements and the right match of vending machines."
"Acquisition is a key element of the USA growth strategy," says Holt. "It enables us to overlay our proven franchise business model, provides greater leverage into new markets and significantly reduces the franchisee recruitment timeline - providing stronger cash-flow. The other significant factor is the ability to offer potential franchisees cash flow from day one, which makes our 24seven franchises a very attractive proposition."
VTL Group Limited Chairman, Gary Stevens said, "The Board is very pleased with the acquisition and the continued growth opportunities that it provides for VTL Group. This delivers VTL Group with an established market presence in Texas with room for further expansion. It will also contribute positively to earnings as we overlay our franchise model, 24seven. This is a good fit with VTL Group's strategy of building a global vending business."
Stevens goes on to say, "The VTL Group has a very strong international management team, lead by Joint Managing Directors John Hotchin and Mervyn Doolan, who have recently relocated to Europe to spearhead the growth for both 24seven and Shop24„µ brands in the European and USA markets. The successful outcome of this purchase now provides the blueprint for future acquisitions. It also strengthens our position in the USA market as well as providing a broader platform to continue expanding the 24seven brand internationally."
VTL Group had applied to NZX for a waiver from the requirement to disclose purchase price under Listing Rule 10.7.4(b). The Company believed that disclosing the purchase price would potentially and unreasonably prejudice its negotiating position in relation to other acquisitions under consideration. NZX declined to grant the waiver.
ENDS About VTL Group VTL Group Limited (NZX:VTL) specialises in franchising, technology and financing, with it's franchised brands represented internationally including North America, Australasia and Europe. The Company's primary growth strategy for 24seven and Shop24 is based around purchasing quality electronic vending equipment for 24seven or the manufacturing of its Shop24 units, installing proprietary control technology and, building a network of Franchised owner/operators.