Northgate Information Solutions Share Discussion Threads

[stateside] 02/5/2007 10:28

And Northgate Information shares shed 2 pence at 85-1/2 after accompanying today's pre-close trading update with news of an acquisition in Belgium.

In response, Altium Securities cut its stance for Northgate Info to 'reduce' from 'hold' with an unchanged price target of 85 pence.

[aspex] 02/5/2007 10:23

'The Board expects the Acquisition to be earnings enhancing (before amortisation, options costs and exceptional items) in the first full financial year following its completion.'

Would anyone like to venture an opinion on this statement?

[stateside] 02/5/2007 09:59

I suppose it's the only way to make a Belgium smile :-(

Market showing what it thinks now. Double whammy? Expensive takeover with cash and shares and weak/poor trading update.

[slaterlp] 02/5/2007 09:58

Sp down today, market not sure about this yet.

[tradx666] 02/5/2007 09:51

stateside,

Yep, tend to agree, they do seem to have paid topdollar here.

regards

T..

[hotfinance14] 02/5/2007 08:48

More buys than sells!!!

[stateside] 02/5/2007 08:21

..and Nis paid £155m for 60% of this? Am I reading this correct?

"For the 12 months ended 31 December 2006(6), ARINSO reported revenues of
€203.8 million (£138.7 million)(1) and EBITA(4) of €17.4 million
(£11.8 million)(1)"

Very expensive methinks.

[hotfinance14] 02/5/2007 07:49

Good to see we have European markets now.

[hotfinance14] 02/5/2007 07:40

I dont expect much movement in the share price today....some good and bad news,

[hotfinance14] 02/5/2007 07:13

Northgate Information Solutions PLC
02 May 2007

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN

NORTHGATE INFORMATION SOLUTIONS PLC

NORTHGATE AGREES TO ACQUIRE A MAJORITY STAKE IN ARINSO AND WILL MAKE A
SUBSEQUENT MANDATORY PUBLIC OFFER FOR THE REMAINING SHARES

Northgate Information Solutions plc ('Northgate' or the 'Company'), the UK's
leading supplier of specialist software, IT services and outsourcing solutions
to the human resources ('HR') and public services markets, announces that it is
to acquire a 60.43 per cent interest in ARINSO International NV ('ARINSO'), a
leading global provider of HR outsourcing and related services.

Northgate has signed an agreement, conditional on Northgate shareholder
approval, (the 'Share Purchase Agreement') with Jos Sluys, the Chief Executive
of ARINSO, to acquire his holding of 9,069,840 shares in ARINSO (representing
approximately 60.43 per cent of the outstanding share capital of ARINSO) for
€18.75 in cash and five new Northgate shares for each ARINSO share. The Share
Purchase Agreement values each ARINSO share at €25.18(1),(2) and the total
consideration for the stake at €228.4 million (£155.4 million)(1),(2) at
yesterday's closing price of 87.5 pence per Northgate share.

Northgate is targeting a completion date for the Share Purchase Agreement of, at
the latest, 1 August 2007. Shortly after completion, Northgate will launch a
mandatory public offer to acquire the remaining shares in ARINSO in accordance
with Belgian rules on public takeovers. The board of ARINSO has indicated that
it will unanimously recommend such an offer to its shareholders subject to
review of the takeover prospectus to be filed in the framework of the takeover
proceedings. The total consideration for the whole of the share capital of
ARINSO upon full acceptance of the offer would be approximately €377.9 million
(£257.2 million)(1),(2),(5).

Summary

• ARINSO, currently listed on Euronext Brussels, is the leading
independent provider of SAP-based HR services and solutions in Europe, Asia
and the Americas including HR outsourcing, technology integration services
and strategic consulting


• ARINSO has a global HR platform with over 2,500 employees operating in
27 countries across five continents. ARINSO has built HR and payroll
solutions for one in five of the world's 500 largest companies, as listed by
Fortune Magazine, from which more than six million employees are currently
being serviced


• The combination of ARINSO with Northgate's existing HR division will
create a world leading HR software and outsourcing operation


• A combined Northgate and ARINSO will be well positioned to address the
$15 billion worldwide HR outsourcing market(7)


• The combination will provide a substantial global platform from which
Northgate can grow the enlarged business through:

- Marketing Northgate's core HR application, ResourceLink, to
international customers through ARINSO's sales and support network;
and
- Further promoting ARINSO's euHReka global platform based on SAP from
which to win multi-national HR outsourcing deals

• Following completion of the Share Purchase Agreement, the Chief
Executive of ARINSO, Jos Sluys, will join the Board of Northgate and take a
leading role in the development of strategic client accounts


• The transaction has the full support of the ARINSO board and senior
management


• For the 12 months ended 31 December 2006(6), ARINSO reported revenues of
€203.8 million (£138.7 million)(1) and EBITA(4) of €17.4 million
(£11.8 million)(1)


• The Board expects the Acquisition to be earnings enhancing (before
amortisation, options costs and exceptional items) in the first full
financial year following its completion(3)


• Northgate has arranged a new £500 million debt facility fully
underwritten by a syndicate of banks to complete the Acquisition and
refinance existing facilities

[hotfinance14] 02/5/2007 07:06

Northgate Information Solutions PLC
02 May 2007



NORTHGATE INFORMATION SOLUTIONS PLC

PRE-CLOSE PERIOD STATEMENT
AND ACQUISITION OF KENDRIC ASH

Northgate Information Solutions plc (www.northgate-is.com), the UK's leading
supplier of specialist software and IT services for the Human Resources and
Public Service markets, today issues a trading update for the 12 months to April
30th 2007, ahead of entering its closed period.

During the year, the group made good progress. Revenue growth in the second half
of the year was driven by the continued strong performance of the Human
Resources division and a rising workload in the Managed Services and Public
Services divisions. Accelerating revenue growth is a clear vindication of the
group's sustained investment in sales and marketing spend throughout 2007 which
is now benefiting the group despite the ongoing challenging conditions in the
criminal justice market. Whilst this has had a temporary impact on margins it is
pleasing to see this investment in the business delivering top line growth.

The Human Resources division has built on its excellent performance in the first
half of the year and won a number of significant new contracts in the second
half. Notable contract wins in this division included:

• A five-year pensions administration contract with Alliance Boots plc,
expanding the existing HR and payroll services provided by Northgate;

• Providing an outsourced shared service for Payroll & HR to Thistle Hotels for
its 5,000 employees throughout the UK; and

• A five-year contract with the University of Southampton to provide a payroll
and pensions solution to more than 5,000 staff.

The Managed Services division has also seen good progress. The highlight of the
second half was that work commenced on two significant contracts to provide
Information and Communication Technology (ICT) services and support to the
education sector, in Bristol and Northern Ireland. The Bristol contract was the
first of its kind to be signed in the Government's Building Schools for the
Future (BSF) programme, while the Lot 6 contract in Northern Ireland will
ultimately provide ICT support to 150,000 schoolchildren throughout the
Province. Northgate's Managed Services division remains a leader in the BSF
bidding process and to support this position has recently achieved ISO 20000
accreditation for Service Delivery in its Education business operations.
Northgate is currently shortlisted on a further 9 BSF opportunities. Other
notable new contract wins in this division were:

• A major email systems project for North Tyneside and Newcastle City Councils;
• A five-year IT outsource with Sandwell Metropolitan Borough Council;
• The launch of an internet booking service and a further 2 year extension to
the existing managed services contract with DVTA in Northern Ireland;
• An IT support contract with Solihull Metropolitan Borough Council; and
• New infrastructure support contracts with Waterways Ireland, Scottish Criminal
Records, Strathclyde Police, and Seagate Technologies.

Revenue in the Public Services division returned to growth in the second half of
the year, although the criminal justice market remains challenging with projects
being deferred and cancelled as the Home Office focuses on other
priorities. Notable contract wins in this division in the second half that led
to this resumption of growth included:

• A 5 year partnership with the London Borough of Croydon to deliver a multi
application managed service solution, building upon Northgate's successful
implementation of revenues and benefits;
• London Borough of Brent where work has commenced on the Identity Hub project
to automate the recording of changes across multiple systems, improving
services and compliance;
• The delivery of a customer relationship management system for Warrington
Borough Council in support of its customer contact strategy;
• 78 new systems for clients to eliminate fraud in Postal Voting; and
• A management information solution for the Office for Criminal Justice Reform
in partnership with LogicaCMG.

Northgate further announces the acquisition of Kendric Ash, a public sector
change management consultancy, which works closely with its clients in Local
Government to improve their processes and performance, and has delivered more
than £100 million in financial benefits to clients to date. The acquisition from
the founding shareholder and CEO of Kendric Ash, Kenneth Mander, and a number of
other employees will help Northgate widen its service proposition in this fast
growing part of the market. The consideration is payable in the form of cash
and/or loan notes and comprises an initial net payment of £9.2m, a deferred
payment of £0.5m, and a further payment of up to £4.5m subject to various
performance conditions being satisfied over a 2 year period.


As a result of a number of bolt-on acquisitions and other internal
reorganisation measures, Northgate's results for the full year will include a
restructuring charge of approximately £6 million. This exceptional charge will
be largely offset by one off property gains recognised in the year. The
reorganisation is anticipated to deliver significant cost savings in future
years and is expected to return operating margins to the previous levels
expected by management.

Due to the impact of the challenging market conditions in criminal justice and
the group's on-going investment in sales and marketing, the Board expects to
announce full year Earnings Before Interest, Tax and Amortisation towards the
lower end of management's expectations albeit strong cash generation and tight
financial management and planning are expected to ensure that Earnings Per Share
will be at the upper end of expectations.

Northgate remains well positioned to drive the business further forward in
2007/08 and management is comfortable with its trading expectations.

[hotfinance14] 30/4/2007 10:03

If we did sell i would expect a special dividend to be paid out.

[cockneyron] 30/4/2007 09:21

Over the weekend..........The Express

Northgate Information Solutions (speculation it could be lining up a disposal), LED International (speculation that a major contract is imminent) -

The Times

Rumour of the day: Northgate Information Solutions (talk it has been sounding out potential trade buyers for its outsourcing business, which analysts value at about 100 mln stg) -

[hotfinance14] 29/4/2007 19:19

If there is a bid i would expect the share price to be over 100p.

[slaterlp] 28/4/2007 13:27

TW, has given a takeover tip, anybody know if he is referring to NIS?

The recent share price movements seem to indicate that we maybe about get a bit of active bid interest, and if we do, I would imagine that the share price will jump beyond 90p as that was last years price, and it is clear that interested parties would now have to pay more.

[acornoptical] 28/4/2007 11:12

might be big volume but were they al sells we finnished up 2.5p hope we brake 90p this week comeing

[sharw] 27/4/2007 10:02

slaterlp - hf14 has already posted it (4955)

It is worth persisting with your registration - some things are better than here (but not the bbs!)

[slaterlp] 27/4/2007 09:59

Plenty of selling,---- seems to have unsettled a few people.

[slaterlp] 27/4/2007 09:46

sharw, any chance that you could post the bones of the piece you mention?

I registered twice to get a look on an ADVFN competitor, but they take an age to respond.

Thanks

[slaterlp] 27/4/2007 09:42

I dont see why it's so good. Why sell good revenue streams, What will they replace them with?

Anybody got access to TW's comments?

[hotfinance14] 26/4/2007 22:04

Northgate Information Solutions mulling sale of managed services unit - sources
AFX


LONDON (Thomson Financial) - UK software group Northgate Information Solutions PLC is considering selling its managed services business and has been sounding out potential buyers in a disposal that could fetch around 150 mln stg, according to industry sources.

The Hemel Hempstead-based company, which makes software for the public services and human resources markets as well as running customer IT systems, has been talking to trade buyers, a source said.

The managed services business includes helpdesks, IT security, hardware and software.

In 2006 the division had revenues of 117 mln stg, increasing revenues 6 pct, excluding acquisitions.

Customers include BT Group PLC, National Trust Scotland and the UK Government, through the Building Schools for the Future Programme --, a multi-billion investment that will see every UK school building repaired or replaced.

Potential buyers for Northgate's managed service business could include IT services providers such as Computacenter PLC and Fujitsu's IT services business, or possibly a telecoms operator looking to find a new source of revenue, according to industry observers.

A Northgate spokeswoman said it did not comment on market speculation.

Last October Northgate terminated offer talks after receiving a number of unsolicited approaches, understood to have included private equity firms Blackstone Group and Silver Lake Partners.

Analysts said Northgate's mix of long-term contracts and strong presence in the human resources and public sector software markets were attractive to private equity firms.

Northgate hit the headlines in December 2005 when it had to relocate its Hemel Hempstead headquarters and data centre, after they were seriously damaged by the Buncefield oil depot explosion, the biggest industrial fire in peacetime Europe.

Northgate shares closed at 86.25 pence, valuing the company at 462 mln stg.

[stateside] 26/4/2007 21:03

It's a good thing overall. It will flush out anyone interested in the company I'd have thought OR, leave it more vulnerable after the possible sale (if it goes ahead).

Good news overall. Let's unlock the value!

[filmboy] 26/4/2007 20:38

any thoughts out there about the possible sale of managed sevices business for over 115m ?