In a bid to revive a flagging contract base in the North of England and boost its market share in Europe, Computer People Group Plc plans to acquire VNG Group Ltd for UKP7m. The London-based supplier of contract programmers in the UK and US plans to raise UKP5m through an issue of 3m ordinary shares at 182p per share. The offer is being made on the basis of 1.025 new shares for each VNG share in issue. Existing Computer People shareholders will be able to take advantage of a one for six open share offer by NatWest Securities Ltd. Of the UKP5m raised, UKP1.8m will be put down as cash towards the acquisition and the rest will refinance VNG’s debt. VNG bought back Royal Insurance Plc’s shares in the company back in 1991 and the share repurchase accounts for VNG’s high level of debt. Under the terms of the acquisition both companies’ UK operations will be merged at a cost of UKP650,000 against this year’s figures. The company hopes VNG’s continental pean contract operation, Interskill, which has been consistently profitable since 1990, will improve Computer People’s presence in Europe by bringing an international operation with good quality clients. In turn VNG’s access to Computer People’s UK client database should help VNG’s European operation satisfy demand, says the company. The acquisition of VNG’s training business, which brought in UKP395,000 in the first half of 1994, will fulfill one of the company’s strategic objectives of entering new businesses that relate to its core activity.
