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RNS Number : 2050L
Marlowe PLC
21 December 2018
The information contained within this announcement (the
"Announcement") is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014. Upon the publication of this Announcement via
Regulatory Information Service, this inside information is now
considered to be in the public domain.
21 December 2018
Marlowe plc
Acquisition of William Martin
Placing of new Ordinary Shares to raise GBP7 million
Marlowe plc ("Marlowe" or the "Group"), the support services
group focused on acquiring and developing companies that provide
regulated inspection, testing and compliance services for
commercial properties, announces that it has acquired William
Martin Compliance Solutions Limited and Ivor Roy Limited (together
"William Martin") (the "Acquisition") for an implied total
enterprise value of GBP30.0 million.
Formed in 2004, William Martin is a leading technology-enabled
UK provider of property-related health and safety audit and
consultancy services. It provides recurring consultancy alongside a
leading software-as-a-service compliance platform to a wide range
of commercial customers across the UK to ensure regulatory
compliance in areas such as health & safety, fire safety, water
safety, asbestos management and contractor management. The business
employs approximately 100 staff and has offices in London, Leeds
and Norwich.
Through providing consultancy services integrated with Meridian,
its proprietary software platform, William Martin enables customers
to manage risk and statutory compliance across their properties.
William Martin's services significantly extend Marlowe's
capabilities towards providing its customers with a comprehensive
approach to their health & safety and regulatory compliance
needs, from initial audit through to full implementation, and are
expected to generate significant cross-selling opportunities.
For the year to 30 April 2018, William Martin generated revenues
of GBP7.5 million, EBITDA of GBP2.3 million at a margin of
approximately 30%, and profit before tax of GBP2.4 million.
Approximately 85% of William Martin's revenues are recurring. As at
period end, the business has net assets of approximately GBP2.3
million. The Acquisition is expected to be at least 10% earnings
enhancing in the first full year of ownership.
The Company also announces a placing to raise gross proceeds of
approximately GBP7 million before expenses through the issue of
1,700,000 new ordinary shares of 50 pence each (the "Placing
Shares") at 410 pence per share (the "Issue Price") to certain new
and existing investors (the "Placing"). The Placing was
oversubscribed and the Issue Price represents a premium of
approximately 2.2 per cent to the closing mid-market price of 401
pence per share on Thursday 20 December 2018.
Alex Dacre, Chief Executive of Marlowe Plc, said:
"The acquisition of William Martin significantly accelerates our
strategy of providing our customers with a comprehensive one-stop
approach to their health & safety and regulatory compliance
needs. William Martin is a market leader which shares a similar
channel to market with our existing businesses and benefits from
strong relationships with customers who place a high value on the
consultancy and software services. We are confident that this
acquisition will generate attractive returns for Marlowe's
shareholders."
For further information:
Marlowe plc www.marloweplc.com
Alex Dacre, Chief Executive Tel: +44 (0) 203 841
6194
Mark Adams, Group Finance Director IR@marloweplc.com
Cenkos Securities plc (Nominated Adviser and Broker)
Nicholas Wells Tel: +44 (0)20 7397
8900
Harry Hargreaves
FTI Consulting
Nick Hasell Tel: +44 (0)20 3727
1340
Alex Le May
About Marlowe plc
Marlowe is an AIM-listed company formed to create sustainable
shareholder value through the acquisition and development of
businesses that provide property regulated inspection, testing and
compliance services in the UK. It is focused on health & safety
compliance, fire safety, security systems, water treatment and air
quality services - which are essential to its customers' operations
and invariably governed by regulation, and where customers require
a single specialist outsourced provider with nationwide coverage.
Our customers can be found on most high streets, in office
complexes and industrial estates, and include SMEs, local
authorities, facilities management providers, multi-site NHS trusts
and FTSE 100 companies.
About the Acquisition
For the year to 30 April 2018, William Martin generated revenues
of GBP7.5 million, EBITDA of GBP2.3 million at a margin of
approximately 30%, and profit before tax of GBP2.4 million. As at
period end, the business has net assets of approximately GBP2.3
million.
Of the total consideration, GBP25.0 million is payable in cash
on completion, funded from the Group's existing cash resources and
revolving credit facility, and approximately GBP1.5 million shall
be satisfied through the issue of 359,454 ordinary shares of 50
pence each in the capital of the Company ("Consideration Shares").
The Consideration Shares are being issued to the vendor who will
remain with the Group going forward, and are locked in for a period
of two years.
Further deferred cash consideration is payable to the vendor,
the value of which shall be determined on the basis of a fixed
multiple of EBITDA generated in the financial year prior to the
exercise of a put and call mechanism which has been put in place.
The put and call mechanism is over 11.6% of the equity of William
Martin. The put and call mechanism can be exercised between two and
five years from completion. The value of the deferred consideration
is expected to be in the range of GBP3.5-7.0 million and is capped
at GBP20 million for regulatory purposes.
The Placing and Placing Agreement
The Company will raise GBP7 million in gross proceeds
(approximately GBP6.8 million net of expenses) through the Placing
of the Placing Shares at the Issue Price through Cenkos Securities
plc ("Cenkos") to provide resources to continue converting the
Group's pipeline of smaller bolt-on acquisition. The Placing Shares
will be issued under the Company's existing authorities, and the
Placing is conditional on the Acquisition.
The Placing is not underwritten. The Placing Agreement contains
certain customary warranties and indemnities from the Company in
favour of Cenkos and is conditional, inter alia, upon:
a) the Placing Agreement having become unconditional in all
respects (save for the condition relating to Admission) and not
having been terminated in accordance with its terms prior to
Admission; and
b) Admission becoming effective not later than 8.00 a.m. on 28
December 2018 for the Placing Shares.
The Placing Agreement provisions enable Cenkos to terminate the
Placing Agreement in certain circumstances prior to Admission (as
applicable), including where any warranties are found to be untrue,
inaccurate or misleading in any material respect or in the event of
a material adverse change in the financial position or prospects of
the Group in the context of the Placing or Admission.
Total Voting Rights
Application has been made for the Placing Shares and
Consideration Shares to be admitted to trading on AIM, and it is
expected that admission will occur at 8.00 a.m. on or around 28
December 2018. Following admission of the Placing Shares and
Consideration Shares, the Company's issued ordinary share capital
will comprise 40,786,879 ordinary shares, none of which are held in
treasury.
Therefore, the total number of ordinary shares with voting
rights in the Company will be 40,786,879, which 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 Company under the FCA's
Disclosure Guidance and Transparency Rules.
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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