INVESTORS : Post

Straight plc (AIM: STT), the environmental products and services group, is pleased to announce that it has acquired the business and certain assets relating to the UK manufacturing operations of Helesi plc (AIM: HLS), for a total consideration of £1.65m in cash.

Straight has acquired assets, including moulds and presses, relating to the manufacture of Helesi's most popular wheeled refuse and recycling containers in the UK. Following the acquisition, manufacturing of these products will be carried out by one of Straight's established manufacturing partners. The Group will begin selling the products directly to its wide customer base and will assume Helesi's position supplying the UK and Irish markets, as well as taking over existing customer contracts and supply agreements. These products will be jointly branded 'Straight' and 'Helesi'.

The consideration consists of an initial payment of £0.45m on exchange, a further £0.45m on completion and the balance paid in ten equal monthly instalments commencing on 30 April 2010. The initial payments will be part funded by a loan of £0.75m from Straight's lending bank, Lloyds TSB, with the remainder of the consideration being paid from the Group's existing cash resources. In addition to the cash consideration, Straight will pay Helesi an ongoing royalty for the use of its brand on jointly branded products.

For the six months to 30 June 2009, Helesi plc's UK business generated revenues of approximately €4.4m and profit before finance charges of €0.3m.

Despite holding a 10-15% share of the UK wheeled bin market, Straight has never had a proprietary wheeled bin. Straight believes that over time this move will enable it to generate margins on wheeled bins more in line with those which the Group generates on its core proprietary container range. The Group believes that the addition of this proprietary wheeled bin range will significantly strengthen its position in its core markets.

As part of the agreement, Straight has entered into a strategic alliance with Helesi under which it will become the exclusive UK and Irish distributor and licensee for other Helesi products including plastic 4-wheeled bins. The Group will also have the right of first refusal to import and distribute any new products developed by Helesi. Both companies expect to work together on the development of new products - utilising Straight's innovative expertise and Helesi's technical know how.

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

"We have been a distributor of Helesi products in the UK for a number of years and our customers have always been very satisfied with their high quality. We are delighted that we are now able to service these markets with a proprietary product, manufactured locally and in line with our proven model which prides itself on quality, innovation and market leadership."