Horizon Founder and Chairman Samir Naji

IT group Horizon Technology announced today that that it has entered into an agreement, subject to Competition Authority approval, to dispose of its Distribution & Channel Services Division to a Westcoast group company.

Under the terms of the agreement, the consideration for the disposal is a maximum of €6.2million in cash. In addition, on completion, Westcoast will assume responsibility for the division’s working capital debt of €9.1million. Of the cash consideration, €3.1million will be paid on completion and the remaining €3.1million is deferred for three months pending the preparation and agreement of a statement of completion net assets.

The Distribution & Channel Services Division, Clarity Ireland, supplies supply chain and channel management services to global IT vendors and resellers in the Irish market. Clarity Ireland had 2005 revenue of €118.6 million and EBIT (earnings before interest and taxation) of €1.4 million, or 12% of Horizon’s EBIT. The Division employs 49 staff and its assets at completion are estimated at €15.5million.

Horizon said that the disposal will enable it focus exclusively on the enterprise infrastructure and applications markets, segments that are experiencing high growth. Following the transaction, the group will have significantly reduced borrowings and improved flexibility to allocate additional resources to the continued development of the enterprise infrastructure and application consulting businesses in the UK and Irish markets.

Market Update

Horizon said that its enterprise solutions business continues to show growth in revenue and earnings, both organically and including the recent acquisitions of Equip Technology Limited and EPC Limited.

In July, Horizon invested in the recruitment and training of a new team of specialists to build a storage solutions business as part of in the enterprise solutions operation in the UK. This new development extends Horizon’s capabilities in the high growth data management market and builds on the Group’s newer partnerships with EMC and Veritas in the UK.

With the continued strong performance in the enterprise solutions division, the disposal of the distribution division and the investment in the storage solutions business, the board now expects 2006 full year diluted adjusted earnings per share to be in the range of 9 cent to 9.5 cent.

Commenting on the developments, Horizon’s CEO, Gary Coburn, said:

“Following the disposal of Clarity Ireland, the Group now has a sharper focus on the enterprise solutions market and will increase the level of resources allocated to take full advantage of the exciting opportunities offered by this market. An example of this is our recent investment in the UK storage solutions business. Our objective now is to accelerate the development of our enterprise solutions businesses, both organically and through bolt-on developments and acquisition. With these developments the Group is well positioned to deliver earnings growth in 2007 and beyond."