INVESTORS : Post

Straight plc (AIM: STT), the environmental products and services group, is pleased to announce that it has acquired Dyro Holdings Limited ("Dyro"), its leading injection moulding partner, for a consideration of £2.9m.

Dyro, which trades as Powell Plastics, is based at a factory in Hull and operates more than 20 injection moulding machines. During the year ended 31 December 2009, Dyro's turnover was £10.0m and profit before tax was £1.12m. £7.1m of this turnover was attributable to the Group in the same period.

Straight has acquired the entire share capital of Dyro in a vertical integration move which will strengthen the Group's position in its core markets and also will form a platform for the Group's future development.

The Board believes that the addition of Dyro's manufacturing capability will allow the Group to enhance overall profitability and fully exploit its market leading position. Dyro's location in east Hull, with its good road links and easy access to UK ports, will also provide the Group with a new UK distribution hub and an excellent base for its growing exports business.

The consideration of £2.9m consists of an initial cash payment of £0.97m with two further cash payments of £0.97m on each of the first and second anniversaries of completion. The initial payment has been funded through a loan of £1.5m from the Group's lending bank, Lloyds TSB. The deferred element of the consideration will be funded from cash generated as a consequence of the acquisition. The balance of the loan is being used to fund Dyro's working capital requirements. Prior to completion of the acquisition, Dyro entered into a sale and leaseback agreement with the vendors on Dyro's property with an annual rent of £145,000.

Dyro has been a supplier to the Group for a number of years. During the last six months, trading with Dyro has increased considerably further to its hosting of the wheeled bin production equipment acquired by the Group from Helesi in March 2010.

In addition to the products it manufactures for the Group, Dyro also has a proprietary injection moulding business which supplies shelving and storage products to the DIY sector. These products are complementary to the Group's garden and hardware business and cost saving and cross-selling synergies are expected.

The Board is pleased to report that good progress has been made by the Group towards the operational integration of the assets acquired from Helesi. A number of customers have already been supplied with wheeled bins made by the Group in Dyro's factory. The Group has also made good progress towards re-establishing the market share it enjoyed in wheeled bins prior to the closure of Helesi's UK factory in September 2009.

Welcoming the news, Jonathan Straight, Chief Executive of Straight plc, said:

"The evolution of Straight's business model into direct production further strengthens its position in its core market place and will act as a springboard for further vertical integration as well as future acquisitions."

"Our team has considerable experience in running manufacturing businesses at both Board and management levels and this will aid the speedy integration of Dyro into the Group."

"The Board has plans to further develop its new Hull site in line with the strategic goals of the Group."