Logitek Plc, which is subject of a 34 pence a share paper offer from Microvitec Plc, yesterday announced that it will be recommending to shareholders the sale of its Novell distributor arm, Azlan Ltd, to a management buyout team, in an attempt to strengthen the group’s balance sheet and put the company back on an even keel. The Purchaser buyout team, which is backed by CIN Venture Managers Ltd, will pay around UKP4.3m cash for Azlan, as well as repaying intercompany debt of UKP300,000, and assuming Azlan’s UKP2m net external borrowings. The sale, which is expected to take place on March 28, will reduce group borrowings by around UKP6.4m. Azlan is a wholly-owned subsidiary of Advansys Plc, which Logitek acquired in 1989. This distribution division contributed UKP1m pre-tax profits on revenues of UKP18m for the 10 months to January 31, and had accumulated net assets of UKP1.5m. Following completion of the sale, Azlan will continue to operate from its leased premises in Wokingham, Surrey and York, and the Logitek Computers, Microtex and LTSS Ltd divisions which shared the same location will be moved to the group’s Slough premises for a UKP200,000 saving in annual property costs. If the sale does not go through, group directors reckon that, without bank support, Logitek will not have sufficient working capital for Azlan’s current requirements. No-one was available for comment yesterday, but the fact that Logitek is looking to go ahead with the divestment of the Azlan business implies that it is preparing a dusty answer for the Microvitec bid.
