TIDMNTBR
RNS Number : 9542Z
Northern Bear Plc
16 January 2020
16 January 2020
Northern Bear PLC
("Northern Bear" or the "Company")
Acquisition of J Lister
Northern Bear, the AIM listed group of companies (together, the
"Group") providing specialist building and support services to
customers in Northern England and across the UK, is delighted to
announce the acquisition of Lister Holdings (York) Limited and its
wholly owned subsidiary J Lister Electrical Limited (together "J
Lister") (the "Acquisition").
Key highlights
-- J Lister is an electrical contracting business based in York, established in 1973.
-- J Lister has an established customer base and offers
significant growth potential, via both organic expansion of the
existing business and cross selling with other Northern Bear Group
companies.
-- For the year ended 31 March 2019, J Lister achieved revenue
of GBP2.5m and profit before tax of GBP0.28m.
-- The Acquisition is expected to be earnings enhancing for Northern Bear.
-- Initial and deferred consideration of GBP0.95m, including the
issue of GBP0.1m in ordinary shares in Northern Bear, with a
further earn-out payment of up to GBP0.3m in cash, dependent on
profits in excess of historical levels (see below).
-- J Lister will be part of Northern Bear's Specialist Building Services reporting segment.
Steve Roberts, Executive Chairman of Northern Bear,
commented:
"I am delighted to announce the acquisition of J Lister. We have
looked at a large number of opportunities since our last
acquisition, being that of H Peel & Sons (Holdings) Limited and
its subsidiary, in July 2017. We have now acquired a
well-established, consistently profitable and cash generative
business with a strong management team committed to remaining with
the business. In addition, J Lister has a number of opportunities
for expansion and to cross-sell with our existing Group companies.
I would like to welcome all of the J Lister employees to our Group
and we look forward to working with them."
For further information please contact:
+44 (0) 166
Northern Bear plc 182 0369
Steve Roberts - Executive Chairman +44 (0) 166
Tom Hayes - Finance Director 182 0369
Strand Hanson Limited (Nominated Adviser
and Broker)
James Harris +44 (0) 20 7409
James Bellman 3494
Further information on the Acquisition
Further information on J Lister
J Lister was established in 1973, is based in the City of York
and operates across the North of England. It has a strong
reputation in the Yorkshire market, based on operating in both the
commercial and domestic sectors, with several long standing,
blue-chip customers providing a high volume of recurring orders.
Key services provided include electrical repairs, installation,
maintenance and testing, fire alarms, emergency lighting, and door
access systems.
J Lister demonstrates a consistent track record of profitability
and cash generation, including during the last major recession. The
business has grown in recent years through an expanded service
offering, including CAD and technical drawings, design and
consultancy, and project management, as well as working on larger
projects.
J Lister has a very strong order book, including a major new
contract recently secured and commenced which should underpin short
term profitability. There are future growth opportunities for J
Lister via larger contracts for the existing customer base, new
customer opportunities and geographic expansion. We also expect a
number of cross-selling opportunities for J Lister via the Group's
existing customer base.
Consideration for the Acquisition
The purchase consideration (the "Consideration"), payable to the
shareholders of Lister Holdings (York) Limited ("Sellers"), is as
follows:
-- Cash consideration of GBP0.75m payable on completion;
-- Deferred cash consideration of GBP0.1m, due in two annual
instalments on the first and second anniversaries of the completion
date (15 January 2020) ("Completion");
-- 136,054 ordinary shares of 1p each in Northern Bear (the
"Consideration Shares") due on Completion, valued at approximately
GBP0.1m, based on the average closing mid-market price of the
Company's ordinary shares for the five working days ended on 15
January 2020, being 73.5p; and
-- Up to GBP0.3m payable in cash under an earn-out over a
three-year period. This amount would only be payable if the
business generates profits over that period in excess of historical
levels (see below).
The maximum aggregate amount of the Consideration will be
GBP1.25m, should all future earn out targets be met in full. To
achieve the full earn-out of GBP0.3m, cumulative profit before tax
for the three years to 30 September 2022 must exceed GBP1.422m.
The Consideration Shares are subject to a lock in and orderly
market arrangement pursuant to which the sellers have undertaken
that, subject to certain limited exceptions, 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 initial
period, that they will only dispose of their holdings with the
consent of the Company and Strand Hanson, the Company's Nominated
Adviser and Broker.
The acquisition is expected to be earnings enhancing for
Northern Bear in the financial year to 31 March 2020, and it is
anticipated that all future earn-out and deferred consideration
payments will be met through cash generated by J Lister. The
initial cash element of the Consideration due on completion will be
met from the Group's existing bank facilities.
Consideration Shares
The Company has agreed to issue the Consideration Shares, which
will rank pari passu with the Company's existing ordinary shares,
to the Sellers, conditional upon their admission to trading on AIM
("Admission"). Application will be made for Admission and it is
expected that Admission will become effective and trading will
commence at 8.00 a.m. on 24 January 2020.
Following Admission, the Company's total issued share capital
will consist of 18,655,276 ordinary shares of 1p each with voting
rights, plus a further 362,040 non-voting ordinary shares which the
Company holds in treasury.
On Admission, the abovementioned figure of 18,655,276 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 and
Transparency Rules.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQUVVWRRSUAAAR
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January 16, 2020 02:00 ET (07:00 GMT)
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