Northern Bear Plc Acquisition of H Peel & Sons (0222M)
July 25 2017 - 5:30AM
UK Regulatory
TIDMNTBR
RNS Number : 0222M
Northern Bear Plc
25 July 2017
25 July 2017
Northern Bear PLC
("Northern Bear" or the "Group")
Acquisition of H Peel & Sons
Northern Bear is pleased to announce the acquisition of 100 per
cent. of the share capital of H Peel & Sons (Holdings) Limited,
including its wholly owned subsidiary H Peel & Sons Limited
(together, "H Peel") (the "Acquisition").
H Peel is an interiors and fit-out business based in Dewsbury,
West Yorkshire. It has a blue chip client base across the UK and
operates primarily in the hotel and leisure sectors. As with other
existing Group companies, H Peel is well established in its sector,
consistently profitable and cash generative. The management team at
H Peel have been with the company for many years and have committed
to remain with the business for at least three years post
completion of the Acquisition. The transaction meets all of our
acquisition criteria and we see it as an excellent fit for the
Group, providing further sectoral and geographical
diversification.
The purchase consideration, payable to Charon LLP and the
management of H Peel (the "Vendors"), will be a maximum of
approximately GBP2.9m in aggregate (the "Consideration"). The
Consideration will take the form of approximately GBP0.7m cash
payable immediately (the "Cash Consideration"), GBP0.4m deferred
cash consideration due in four equal 6-monthly instalments
commencing 6 months from completion of the Acquisition, 461,538
ordinary shares in Northern Bear (valued at approximately GBP0.4m
based on the closing mid-market price of the Group's ordinary
shares on 24 July 2017, being 82p) (the "Consideration Shares") and
a maximum of GBP1.4m of contingent cash consideration payable under
various earnout agreements.
H Peel generated turnover of GBP5.4m, reported profit before
taxation of GBP0.4m and adjusted* profit before taxation of GBP0.5m
in the year ended 31 August 2016 (unaudited). In the three years
ended 31 August 2016, the average reported profit before taxation
was GBP0.6m (unaudited) and average adjusted* profit before
taxation was GBP0.7m (unaudited).
The acquisition is expected to be earnings enhancing for
Northern Bear in the coming year to 31 March 2018 and it is
anticipated that all future earnout and deferred consideration
payments will be met through cash generated by H Peel. The Cash
Consideration will be met from the Group's existing revolving bank
facilities.
H Peel has been acquired on a debt-free cash free basis after
adjustment for normalised working capital, on which basis the net
asset position for the group being acquired is approximately nil. H
Peel & Sons Limited, the trading company of H Peel, was subject
to a management buyout in June 2014 effected through H Peel &
Sons (Holdings) Limited. As at 31 May 2014, H Peel and Sons Limited
had retained reserves of approximately GBP2.4m. The Consideration
Shares are subject to a lock in and orderly market arrangement
pursuant to which the Vendors have undertaken that they will not
dispose of any interest in the Consideration Shares for a period of
12 months from the date of admission to trading on AIM of the
Consideration Shares and, for the 12 months following that period,
that they will only dispose of their holdings with the consent of
Strand Hanson.
* adjusted profits are after stated after adding back one-off
and non-recurring items, principally transaction and investor
related costs.
Steve Roberts, Executive Chairman of Northern Bear,
commented:
"I am delighted to announce our first acquisition for almost ten
years. We have looked at a number of acquisition opportunities in
recent years and H Peel was the first one that met all of our
criteria. We have acquired a well-established, consistently
profitable and cash generative business with a strong management
team in place who are committed to remaining with the business. I
would like to welcome all of H Peel's employees to our Group and
look forward to working with them. "
Application will be made for 461,538 Consideration Shares to be
admitted to trading on AIM on 1 August 2017. Following the issue of
the Consideration Shares, the Company's issued share capital will
consist of 18,406,722 ordinary shares with voting rights; in
addition, the Company holds 474,540 ordinary shares in
treasury.
The aforementioned figure of 18,406,722 ordinary shares may be
used by shareholders in the Company 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,
Northern Bear under the Financial Conduct Authority's Disclosure
and Transparency Rules.
For further information contact:
Northern Bear PLC +44 (0) 166
Steve Roberts - Executive 182 0369
Chairman +44 (0) 166
Tom Hayes - Finance Director 182 0369
Strand Hanson Limited (Nominated
Adviser and Broker)
James Harris
James Spinney +44 (0) 20
James Bellman 7409 3494
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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