ICM takeover talk reaches a peak

After a month of silence, two parties interested in acquiring ICM have come out of the woodwork. The first is Phoenix IT Group plc, parent company of NDR (one of ICM’s competitors in the business continuity market place) and the other is a management buyout team.

Phoenix issued the following statement this morning (19th January):

“ Phoenix notes the press speculation that it is in talks with ICM Computer Group plc in relation to a possible offer for ICM by Phoenix . Phoenix confirms that it is in preliminary discussions with ICM. There can be no certainty that these discussions will lead to an offer being made by Phoenix for ICM.”

This followed a statement, issued by ICM yesterday, which confirmed that ICM was in talks with a third party but also that it had given permission for a management team, including Stephen Wainwright, Craig Fairey and Anthony Granelli, to explore a management buy-out ‘which may or may not lead to an offer being made for ICM’.

ICM also published a trading statement yesterday which highlighted strong turnover growth in the group's Business Continuity Division which is expected to be up by 28 percent on the six months to 31 December 2005. The statement reads as follows (verbatim):

"ICM Computer Group (LSE: ICM, 'the Group'), the Business Availability group, is publishing today a half year trading update covering the six months to 31 December 2006.

The Group is now benefiting strongly from the streamlining of the Group, the
refreshment of the strategy, and the focus on 'Business Availability' to meet
changing customer needs, all of which were initiated during 2006. The Board continues to remain extremely confident in the Group's prospects in the current financial year.

The Group now has two operational divisions, Managed Availability and Business Continuity, with Group-wide sales and operations. Furthermore since the summer, the range and scope of products and services across the Group have been further strengthened.

Profitability in the Managed Availability division moved forward well due to the
focus on effective delivery and contracted business. This was achieved on a
slightly lower turnover as the Group continued its programme of reducing its
exposure to the low margin hardware sales business.

Strong turnover growth has been achieved in the Group's Business Continuity division which is expected to be up by 28% on the six months to 31 December 2005. This division has benefited not only from the profitable contribution from the Group's flagship business continuity centre at Romford but from the wider national coverage now provided following the opening last year of both Romford and Hamilton in Scotland.

Gross margins in each of the divisions have increased compared to the six months ended 31 December 2005 and forward visibility coming from long term ongoing contracts remains strong.

The Group expects to report its interim results for the six months to 31
December 2006 in February 2007.

Steve Wainwright, ICM's Chief Executive, commented:

'We are delighted to see that the changes and initiative that we instigated only a few months ago, together with the investment in Romford, are already bearing fruit strongly and so quickly.

'There is no doubt that the Business Availability strategy which combines our
national business continuity capability with national managed availability
capability is also gaining momentum.' "

•Date: 19th January 2007 • Region: UK •Type: Article •Topic: BC markets
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