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Investors paying $10.6 million for 19.9% of VTL

Two leading Boston-based investors paying $10.6 million for 19.9% of VTL Group

Auckland, December 5, 2006. Two high-profile Boston-based investors are paying a total of approximately $NZ10.6 million ($US7,308,284) to each purchase 9.95% shareholdings in NZX-listed VTL Group Ltd (NZX: VTL).

The transactions, which will involve the company selling 1,038,284 shares from its treasury stock and the issue of 6,270,000 new VTL shares, are being done at a price of approximately $NZ1.45 a share ($US1.00 a share).

VTL shares closed yesterday at $1.15 and the average cost to the company of the on-sold treasury stock that it acquired on-market last year, is 64.3c.

The deal, which requires the approval of VTL shareholders at a special meeting before 31 January 2007, will see Mr John Halpern and Mr George P. Denny III, both have personal holdings of 3,654,142 VTL shares.

Mr John Halpern and Mr George P Denny lll founded Boston Based investment company Halpern, Denny &Co (www.halperndenny.com) in 1991. Both are former executives of Bain & Company and Bain Capital.

Mr George P Denny lll said his personal investment philosophy was to back strong management teams in high-growth industries. He said, ”We look to add strategic and financial expertise as necessary to enhance operational efficiency and build highly profitable companies.”

VTL Group’s chairman, Mr Gary Stevens, says the cash raised through the transaction will strengthen VTL’s balance sheet, underpinning its expansion plans in the United States, Europe and Australia ─ particularly its US expansion through Service America Group, Inc. (previously All Seasons Holdings, Inc.).

“Halpern, Denny & Co managed funds currently have a 71.9% interest in Service America Group and is totally familiar with our franchising business model. We see their founders’ move to acquire a personal stake in VTL as very positive and an endorsement of our business strategy.”

Mr Stevens said VTL Group was still on track to exercise its pre-paid option to acquire a majority shareholding in Service America in the current financial year.

“As we have said previously, exercising this pre-paid option will see Service America’s results consolidated into ours, lifting our annual revenue from last year’s $48.5 million to almost $300 million.

“Equally as important, it continues to give us direct access to some 37,000 vending machines on some 10,000 sites, which we will be able to on-sell to franchise operators.”

Last week VTL announced that it was gaining access to further vending machine sites by agreeing to buy the vending machine assets of Nor-Cal Beverage, Inc., in Sacramento, Northern California.

The company intends to convert these assets to its 24seven franchised business model over the next 12 months, creating more than 20 franchised routes for sale. Currently these franchises routes are being sold for $US254,000 each.

“We are now seeing an increased market awareness of the value of our leading-edge technology and how it transforms the economics of traditional vending businesses.

“We are well placed to increase our market share through a combination of both organic growth and acquisitions.”


Background on John Halpern and George P Denny lll

Mr John Halpern, prior to forming Halpern, Denny & Co in 1991, was a founder and the second largest shareholder of Bain & Company. He served as that company’s Vice Chairman until 1990.

For 15 years, he was Bain & Company’s Director of North American client development and strategy.

Prior to the formation of Bain & Company, Mr. Halpern was a consultant at Boston Consulting Group. He is a graduate of Yale University, magna cum laude and Phi Beta Kappa, and has an MBA from the Harvard Business School.

Mr George P. Denny, III was previously the Managing Director for Bain Holdings, an investment partnership formed by Bain & Company.

Prior to joining Bain & Company, Mr. Denny worked at Brown Brothers Harriman & Company and served on the finance faculty of the Harvard Business School.

About VTL Group Limited

VTL Group Limited (NZX: VTL) is a global franchisor, with its franchised brands represented internationally including Australasia, North America, UK and Europe. VTL Group’s franchise model is supported by a complete management system including its leading-edge proprietary technology and financing. 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.

ENDS

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