Altitude Group plc have announced that they have entered into a conditional sale and purchase agreement to dispose of their Promotional Products Division. The division principally consists of trade supplier; AdProducts.com and distributor companies; Dowlis Corporate Solutions, Ross Promotional and Non Stop Promotions.

The buyers are Stridage Holdings, which is a new company partly owned by certain members of the management teams of these businesses. The shareholders of Stridage are Stuart Ross (Currently Ross Promotional), David Lynn (currently Dowlis Corporate Solutions), George Goodfellow (currently AdProducts) and Richard Sowerby. The Consideration for purchase of the Promotional Products Division has been reported at ?6.27 million.

The purchase price of ?6.27m is payable as follows: a Cash consideration of ?721,043, repayment of amounts due to the Company from Dowlis and AdProducts which are estimated at ?1,547,352; and the issue of ?4,000,000 of secured 2016 Loan Notes. The Loan Notes have an annual interest of whichever is the higher of 8% or 2% above base rate. Repayments are to be made monthly. The Disposal will realise approximately ?2.2m of cash for the Group and in due course, ?4m from the repayment of the Loan Notes.

As the Promotional Products Division accounted for approximately 84% of the Group’s revenues in the last financial year, shareholder approval to complete the sale is to be sort at a general meeting which will take place at 10:00am on 12 July 2011.

The announcement made on the London Stock Exchange stated that in the year ended 31 December 2010, the Promotional Products Division had sales of ?15.6m, pre-exceptionals operating profit of ?0.9m, and post-exceptionals operating profit of ?0.6m. The average number of Promotional Products Division employees in the year ended 31 December 2010 was 103. As at 31 December 2010 the value of the net assets being sold was ?4.7m. In the same period, the Information and Technology Division had sales of ?2.9m, on which it made an operating profit (before exceptionals) of ?0.7m. The average number of ITD employees in the same period was 24.

The Directors have unanimously recommend shareholders to vote in favour of the Resolution at the general meeting. The group have stated that the disposal will enable the Group to invest in, and accelerate, the development of their Information and Technology Division, particularly in the USA.