Acquisition of Business Healthcare Limited (“BHC”)

RPS announces the acquisition of BHC, a leading provider of occupational healthcare services to the UK industrial sector, for a maximum consideration of £3.6 million.

Introduction

Over the last decade RPS’s strategy has been to enhance our market position by developing and broadening our product range, employing highly skilled staff and making acquisitions of quality businesses in order to extend our expertise and geographical reach. Successful implementation of this strategy has enabled us to build market leading positions in our chosen areas, and provide the highest quality advice to our clients and rewarding careers to our staff, whilst also growing profits.

BHC

BHC was established in 1996 as a specialist occupational health provider. It has a core staff of approximately 60 based mainly in Mansfield, Nottinghamshire and also at regional clinics in Bristol, Birmingham and Normanton in West Yorkshire. It offers a broad range of services to the public and private sectors including pre-employment assessments, in-service medicals, targeted health surveillance programmes and sickness absence management. Services are tailored to each client’s specific needs and are delivered by a dedicated team of occupational health nurses and occupational physicians on the client’s premises and by using the company's mobile medical units. BHC has large, blue chip clients in the construction, mining, quarrying, manufacturing, engineering, chemical and food sectors, including Caterpillar, Coca Cola, Corus, Honeywell, Siemens, UK Coal and the DTI.

The acquisition of BHC takes RPS into a new area of operation and further extends the range of products and services we can offer our clients. Following acquisition BHC will be integrated with our existing health & safety activities enabling it to benefit from both RPS’s client base and management systems. The two executive directors of BHC will be remaining with RPS.

In the year ended 31 December 2004 BHC had turnover of about £2.9 million and pro forma profit before tax of about £0.5 million, after adjusting directors’ salaries to reflect the cost to RPS of their continued employment. At 31 December 2004 net assets totalled £0.7 million (including cash of about £0.3 million).

The maximum total consideration payable for BHC is £3.6 million. At completion the shareholders of BHC received £1.9 million in cash and 141,311 new RPS shares priced at 157 pence and valued at £0.2 million. Assuming certain operational conditions are met, the balance of the consideration (£1.5 million) will be paid, in cash, over the next three years.

Commenting on this transaction, Brook Land (RPS Chairman), said:

“Business Healthcare Limited is a highly respected consultancy which gives RPS a significant presence in the occupational health market. The integration of BHC into our existing health and safety business will extend our range of services in this growing sector.

The Group’s trading has progressed as we anticipated in the statement made on 26 May. The acquisition of BHC will assist further growth. Other acquisitions are currently being given detailed consideration.”

8th July 2005

ENQUIRIES

RPS Group Plc
Dr Alan Hearne, Chief Executive
Gary Young, Finance Director
Tel: 01235 863206

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Matthew Smallwood
Justine Warren
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