TIDMFRP
RNS Number : 6030Q
FRP Advisory Group PLC
01 March 2021
1 March 2021
FRP ADVISORY GROUP PLC
("FRP", the "Group" or the "Company")
Acquisition
FRP Advisory Group plc, a leading UK professional services firm
specialising in advisory services, today announces the acquisition
of Spectrum Corporate Finance Limited ("Spectrum"), a leading
Corporate Finance and Debt Advisory boutique to UK mid-market
clients and their funders.
The consideration comprises cash of GBP9.4 million plus a
further payment contingent on the net assets at completion of up to
circa GBP3 million. The five key selling shareholders have also
entered into a subscription agreement to reinvest GBP3.76 million
of the proceeds into new ordinary shares which will be issued by
FRP.
Spectrum was founded in 2010 by Simon Davies, Clive Hatchard and
Ian Milne. They provide coverage of the UK from their offices in
Reading and London, with particular focus on the central South,
South East and London. All 27 colleagues will join FRP including:
seven Partners (Simon Davies, Clive Hatchard, Ian Milne, Mark
Farlow, Simon Sherliker, Darren Miller and James Mines); 12 other
fee earners; four research colleagues and four support
colleagues.
In the last reported financial year ended September 2020,
Spectrum recorded unaudited revenues of GBP4.0m and unaudited
adjusted(1) EBITDA of GBP0.5 million, with several large
transactions falling into the current financial year as a result of
the adverse impact of COVID-19. In the previous two financial years
to September 2018 and 2019 Spectrum averaged unaudited revenues of
GBP6.4 million and unaudited adjusted(1) EBITDA of GBP2.5m. On an
annual basis going forward it is expected that Spectrum's
underlying incremental contribution to FRP will be revenue of
GBP7.5 million and adjusted(1) EBITDA of GBP2.1 million. However,
within specific financial years there will be timing volatility of
when transactions complete as demonstrated by Spectrum having
completed 12 transactions in calendar Q4 2020.
Geoff Rowley, FRP CEO said:
"Spectrum is another excellent addition to FRP, in line with our
strategy to complement our organic growth with high quality
selective acquisitions.
It further bolsters our Corporate Finance and Debt Advisory
offering, following the East Anglian JDC Group (Corporate Finance
and Forensic Services) acquisition in September 2020, as well as
strengthening our UK footprint. Nationally FRP's Corporate Finance
and Debt Advisory teams will now comprise 48 fee earners (including
18 Partners) across 9 locations.
This highly complementary combination will give us a key
position in the UK mid-cap transactional advisory market; it will
enable FRP to continue supporting clients post COVID-19, in
addressing both their strategic ambitions and being available to
help as challenges arise. The Spectrum team have earned themselves
a great reputation, particularly within the UK private equity
community and we are excited about the contribution they will make
to FRP."
Simon Davies, co-founder of Spectrum said:
"We are delighted to have found in FRP a partnership that shares
our values of professionalism, quality, entrepreneurial spirit and
achieving the best possible outcome for clients. We are immensely
proud of what we have achieved at Spectrum over the past ten years,
and as a new chapter starts with FRP, we are excited at the
opportunities this new partnership presents for our team and our
clients. We are looking forward to continuing to grow our Corporate
Finance and Debt Advisory businesses nationally, as a combined
group."
Pursuant to the terms of the subscription agreement, the five
key selling shareholders of Spectrum have agreed to subscribe for
GBP3.76 million of subscription shares, at a subscription price of
103.5p, being the closing mid-price on 23 February 2021
("Subscription Shares"). Application has been made to AIM pursuant
to the issue and admission to trading on AIM of 3,632,852
subscription shares. It is expected that these subscription shares
will be admitted on 4 March 2021.
The cash proceeds will be funded by a partial drawdown under the
existing Revolving Credit Facility (RCF) which has been recently
increased from GBP5 million to GBP10 million. An allocation of nil
cost share option awards, from the existing FRP Employee Incentive
Plan (EIP) will also be made to employees of Spectrum. This EIP was
established and funded on IPO, 6 March 2020.
Following Admission, the Company's issued share capital will
consist of 243,191,489 Ordinary Shares with voting rights. This
number may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the
share capital of the Company under the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
The information contained within this announcement is deemed by
the Group to constitute inside information under the Market Abuse
Regulations No. 596/2014.
(1) Adjusted to reflect Partner compensation under the future
model and excluding exceptional costs, share based payment charges
arising from deemed remuneration or share options granted to staff
which were previously funded on IPO.
Enquiries:
FRP Advisory Group plc
Geoff Rowley, CEO
Jeremy French, COO
Gavin Jones, CFO
Enquiries via MHP
Cenkos Securities plc (Nominated Adviser and Sole Broker)
Max Hartley/Max Gould (Corporate Finance)
Alex Pollen (Sales)
Tel: +44 (0) 207 397 8900
MHP Communications (Financial Public Relations)
Oliver Hughes
Charlie Barker
Pete Lambie
Tel: +44 (0) 20 3128 8570
FRP@mhpc.com
Notes to Editors
FRP is a professional services firm established in 2010 which
offers a range of advisory services to companies, lenders,
investors and other stakeholders, as well as individuals. These
services include:
-- Restructuring advisory: corporate financial advisory, formal
insolvency appointments, informal restructuring advisory, personal
insolvency and general advice to all stakeholders.
-- Corporate finance: mergers and acquisitions (M&A),
strategic advisory and valuations, financial due diligence, capital
raising, special situations M&A and partial exits.
-- Debt advisory: raising and refinancing debt, debt amendments
and extensions, restructuring debt, asset based lending and
corporate and leveraged debt advisory.
-- Forensic services: forensic investigations, compliance and
risk advisory, dispute services and forensic technology.
-- Pensions advisory: pension scheme transaction advisory,
pension scheme restructuring advisory, covenant advisory and
corporate governance
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END
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