Acquisition of Collins and Hayes

 

TIDMAPG 
 
RNS Number : 7946X 
Airsprung Group PLC 
13 December 2010 
 

                              AIRSPRUNG GROUP PLC 
                        ACQUISITION OF COLLINS AND HAYES 
 
Airsprung Group PLC ("Airsprung" or "the Group") is pleased to announce the 
acquisition ("the Acquisition") of Collins and Hayes Furniture Limited ("Collins 
and Hayes") and its trading brand Collins & Hayes for a total consideration of 
GBP2.3 million. 
Collins and Hayes is a furniture manufacturer and distributor based in St 
Leonards-on-Sea, East Sussex, and it has annual sales approaching GBP10 million. 
 Its main product ranges consist of high-quality made-to-order upholstered 
furniture, sold through premium retailers.  The products are offered to 
consumers under the Collins & Hayes and retailers' own brands, and customers 
include Harrods, Selfridges, House of Fraser and Furniture Village. 
The Directors of Airsprung regard Collins and Hayes as a successful and 
well-managed business, with a skilled and committed workforce, and expect the 
Acquisition to strengthen Airsprung's position in the upholstered furniture 
market.  The Group's current presence in this market is provided mainly through 
its Chorley-based subsidiary Cavendish Upholstery.  The Directors believe that 
the combination of Collins & Hayes and Cavendish, under the senior management of 
Collins and Hayes, will create a substantial force in the market for premium 
upholstered furniture and provide significant operating synergies. 
The Directors expect the Acquisition to add significantly to Group profits next 
year and beyond, and to be earnings enhancing. 
The managing director of Collins and Hayes, Martin Huggins, and finance 
director, David Backler, have agreed terms to remain with the business. 
Airsprung will also take on responsibility for an estimated 158 employees of 
Collins and Hayes in accordance with TUPE regulations. 
Information on Collins and Hayes 
Collins & Hayes is a long-established brand whose origins go back more than 130 
years.  The present business, Collins and Hayes Furniture Limited, was 
incorporated in May 2007 and acquired certain trade and assets from the 
administrative receivers of Collins and Hayes Limited, whose parent company 
Collins and Hayes Group plc had been placed into liquidation in April 2007. 
Collins and Hayes generates most of its sales through premium department stores 
and independent retailers in England.  In the year to 30 April 2010, it achieved 
sales of GBP9.8 million, profit before tax of GBP387,400 and EBITDA of 
GBP565,300.  Net assets at 30 April 2010 were GBP0.4 million. 
 Financial Impacts 
Completion is expected to take place on 13 December 2010. 
The total consideration of GBP2.3 million will be satisfied by an initial cash 
payment of GBP2.1 million payable on completion and a final payment of up to 
GBP250,000, which sum is currently held in a retention account and will be 
released when certain conditions are met.  The consideration will be funded by a 
four-year revolving credit facility of GBP2.5 million provided by Svenska 
Handelsbanken AB at 2.5% over LIBOR. 
Profits from Collins and Hayes for the period 13 December 2010 to 31 March 2011 
will be consolidated in the accounts of Airsprung Group PLC for the current 
trading year.  Airsprung's transaction fees are expected to be in the region of 
GBP200,000.  The Acquisition is expected to be earnings enhancing for the year 
2011-12 and beyond. 
 
Comments for media 
Tony Lisanti, chief executive of Airsprung Group PLC, said: 
"Collins and Hayes is a high-quality business which will strengthen our existing 
presence in the furniture sector and create valuable operating and market 
synergies.  I am delighted to welcome its management and workforce as part of 
the Airsprung Group." 
 
 For further information, please contact: 
Airsprung                                 01225 779114 
Tony Lisanti, Chief Executive 
finnCap                                    020 7600 1658 
Marc Young, Charlotte Stranner (Corporate Finance) 
Simon Starr (Corporate Broking) 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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