TIDMMORT
RNS Number : 0523D
Mortice Limited
24 April 2017
Mortice Limited
("Mortice", the "Company" or the "Group")
Acquisition of second UK-based property services company for up
to GBP4.5m
Further broadens client base and geographic coverage in the
UK
Mortice Limited (AIM: MORT), the AIM listed security and
facilities management company, announces that it, and its
wholly-owned subsidiary, Tenon Facility Management UK Limited
("Tenon UK"), have agreed to pay up to GBP4.5m for Manchester-based
Elite Cleaning & Environmental Services Ltd ("Elite") in cash
and shares (the "Acquisition").
Acquisition Highlights
-- Total consideration of up to GBP4.5m on a cash-free,
debt-free basis (subject to certain potential adjustments) to be
satisfied by:
-- GBP3.35m cash consideration, offset by GBP1.6m free cash in
Elite;
-- the allotment of 1,458,333 new ordinary shares of no par
value ("Ordinary Shares" and "Consideration Shares");
-- a conditional earn-out payment of up to GBP1.0m ("Earnout
Consideration"), payable as to GBP700,000 in cash and GBP300,000 in
new Ordinary Shares
-- The new Ordinary Shares are subject to certain lock-in provisions
Acquisition Rationale
The Acquisition, which is expected to be immediately earnings
enhancing, further expands the Company's UK footprint and is in
line with its acquisitive and organic growth strategy, as outlined
on 22 April 2015. Elite has a strong blue-chip client base, which
is complementary to the Company's existing portfolio. In addition,
once fully integrated with the Company's existing infrastructure, a
number of operational savings are expected.
Elite, founded in 1994, has c.1,000 employees and offers a full
range of cleaning services, as well as additional facilities
management services and support services. The company achieved
audited revenues of GBP12.3m and EBITDA of GBP1.0m for the
financial year ended 31 December 2016. Its key services cover
office, industrial, school and healthcare cleaning and its client
base includes ITV, BMW, European Development Bank, Dorset and Wilts
Fire Services, as well as a number of schools, colleges and medical
centres and surgeries.
Acquisition Terms
Tenon UK and the Company have agreed to purchase with the
consideration to be satisfied by the transfer of GBP3.35m in cash
to the sellers ("Gerard McGrath, Kathleen McGrath and John
McGrath")(subject to certain potential adjustments) offset against
GBP1.6m of free cash in Elite, funded from new and existing debt
facilities, and the issue of up to 1,458,333 Consideration Shares.
The Consideration Shares have been allotted at 120p per new
Ordinary Share. If the Consideration Shares are not admitted to
trading on AIM within 60 days of 21 April 2017, a cash payment of
GBP1,750,000 shall be paid to the Sellers by the Company in lieu of
the allotment of such Consideration Shares to the Sellers.
The full Earnout Consideration is payable on pre-agreed targets,
including annualised contracted revenue 12 months post completion
of the Acquisition of at least GBP11.2m and an EBITDA in the
earnout period of at least GBP1m being achieved and is payable up
to GBP700k cash and GBP300k in Ordinary Shares.
Each Seller has undertaken that he will not sell, transfer of
otherwise dispose of, or create an encumbrance over, the
Consideration Shares (or any interest in them) prior to 31 March
2019 (the "Lock-In") subject to certain customary exceptions. In
addition, an option has been granted, to the Sellers, to require
the Company to purchase the Consideration Shares for 120 pence per
share in the period for three months following the expiry of the
Lock-In period.
Total Voting Rights and Admission of Consideration Shares
The Company will apply to the London Stock Exchange for
admission of the Consideration Shares to trading on AIM on 25 April
2017. Following admission, the total number of Ordinary Shares in
issue will be 55,230,540 and the total number of voting rights in
the Company will be 55,230,540. There will be no Ordinary Shares
held in treasury. The above figure 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 Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
Commenting, Manjit Rajain, Executive Chairman of Mortice, said:
"We are delighted to further strengthen our position within the UK
market. Elite has a strong reputation and client base and it offers
clear synergies with our existing operations and presents many
cross-selling opportunities, as well as immediately enhancing the
Group's earnings. We are very excited by the wider market
opportunities and ability to further drive profitability."
This announcement contains information which, prior to its
disclosure, was considered inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014 (MAR).
Enquiries:
Mortice Limited www.morticegroup.com
Manjit Rajain, Executive Tel: +91 981 800 0011
Chairman
finnCap Ltd Tel: 020 7220 0500
Adrian Hargrave / Giles Rolls
/ Alex Price (Corporate Finance)
Tony Quirke (Corporate
Broking)
Walbrook PR Tel: 020 7933 8780 or mortice@walbrookpr.com
Paul McManus/ Sam Allen Mob: 07980 541 893 / 07884
664 686
About Mortice Limited
Mortice (AIM: MORT), is an AIM listed security and facilities
management company, incorporated in Singapore and based in India
with operation across India, Singapore and the UK.
Mortice operates under two brands, in India:
-- Peregrine - provision of guarding and security services to a
wide range of clients from blue-chip companies, smaller businesses,
commercial and private properties, and individuals.
-- Tenon FM- provision of a full range of facilities management
services to corporate occupiers, owners and developers of real
estate. Clients include respected blue-chip and home-grown
companies. Within the Tenon group of companies Mortice also offers
security surveillance services through its subsidiary Soteria and
mechanical and engineering services via Rotopower.
The business is growing and profitable and is focused on
expanding its geographical footprint and growing through targeted
acquisitions, as well as organically.
In 2015, the Company established Tenon UK and through this
wholly owned subsidiary acquired UK based Office & General
Group Limited, an independent property service company specialising
in cleaning and providing support services such as environmental
solutions and built fabric maintenance in the UK. In addition, the
Company acquired a 51% majority stake in Singapore-based security
company Frontline Security Pte. Ltd, and has an option to acquire
an additional 25% within three years.
Learn more about Mortice through this video interview with
Manjit Rajain, Executive Chairman of Mortice:
www.brrmedia.co.uk/broadcasts/57c94e8cd6c09fd74b0ae623/mortice-unlocking-potential
This information is provided by RNS
The company news service from the London Stock Exchange
END
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April 24, 2017 02:00 ET (06:00 GMT)
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