WHSmith Travel division expands following acquisition

WH Smith PLC has acquired UNS Group Limited ('UNS Hospitals') for a cash consideration of £19m. The transaction will be funded from existing cash resources and available bank facilities and will strengthen WHSmith's presence in hospitals across the UK. The acquisition will be earnings neutral in 2007/08 and earnings accretive in 2008/09.

UNS Hospitals trades as United News and has 72 retail units and 8 Caffe Nuovo coffee shops in 62 hospitals throughout the UK. UNS Hospitals has developed a leading position in the hospital sector and has a strong and experienced management team. WHSmith currently has 8 units trading in 7 hospitals and this acquisition significantly strengthens our presence in this growing channel. Exceptional integration costs will be around £1m in the current financial year.

WH Smith PLC has also announced a franchise agreement with RoadChef to open travel units in all 29 RoadChef motorway service areas. This announcement follows a successful trial at the RoadChef service area on the M1 at Watford Gap. Kate Swann, WHSmith Group Chief Executive, said "The acquisition of UNS Hospitals creates further growth opportunities for our Travel business. The hospital channel is under developed and the combination of the experienced UNS management team and the WHSmith brand and offer will bring benefits for customers. "We look forward to working with RoadChef to extend our motorway service area offer, bringing WHSmith products and services direct to the motorist."