Smiths News Acquires Assets From Dawson News Totalling GBP1.5 Million

Smiths News PLC (NWS.LN), a wholesaler of newspapers and magazines, said Monday that effective from August 3, following Surridge Dawson Limited entering administration, the Group has acquired certain assets for a consideration of GBP1.5 million.

MAIN FACTS:

-The Group will assume lessee responsibility for 20 of Dawson's depots as well as IT equipment, which together with the assets acquired, facilitate the early transfer of responsibility for supply of newspapers and magazines in those territories, previously supplied by Dawson, which were won by the Group in the recent round of contract renegotiations with publishers.

-It is also anticipated that 1,800 of Dawson's distribution and head office staff will transfer to the Group under TUPE obligations.

-The Group expects to take responsibility for the supply of all newspaper and magazine product previously supplied by Dawson in these territories. The revenue associated with this will be an increase of circa GBP250 million in the year to August 2010.

-In order to implement these new arrangements in a very short time frame, the Group will be servicing the majority of contracts through Dawson's existing network and, at least initially, using their processes and technology.

-Consequently it is expected that the costs associated with the operation of this infrastructure will be higher in the short term than would typically be the case in the Group's current network.

 
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; [phone]; [e-mail]