Cvs Share Discussion Threads

[ariane] 10/10/2007 09:10

Cvs First Day of Dealings




RNS Number:4404F
CVS Group plc
10 October 2007


For Immediate Release 10 October 2007



NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES, CANADA,

JAPAN OR AUSTRALIA



CVS Group plc

('CVS' or 'the Company' or 'the Group')





First Day of Dealings on the AIM market of the London Stock Exchange



CVS (AIM: CVSG), one of the UK's leading providers of veterinary services,
announces that its ordinary shares have been admitted to trading on AIM
following its successful Placing to raise #92.7million led by Panmure Gordon &
Co. CVS' ticker symbol is CVSG.



Highlights



* The Placing, associated with CVS' admission to AIM, of 45,205,800 shares
(representing 87.7% of the Company's issued share capital) at 205 pence per
share, raises #92.7 million for Selling Shareholders, valuing the whole of
CVS at #105.7 million.



* The Placing was comfortably over-subscribed, with high quality demand at
the Placing Price.



* The purpose of the flotation is to raise the public profile of the Group,
to help drive new business and to increase awareness of the Group within the
veterinary profession. It has also provided an opportunity for Nash Sells
Limited Partnership II, a fund managed by Sovereign Capital Partners LLP, to
realise its investment after eight years of support.



* The Company's three recently appointed non-executive directors have agreed
to buy a total of #100,000 worth of shares at the Placing price.



* The current management team of Simon Innes, Chief Executive since 2004,
and Paul Coxon, Finance Director since 2003, has increased sales from
#12.8m in 2005 to #39.0m in 2007 (year end 30 June), a compound annual
growth rate ('CAGR') of 75%. EBITDA has increased from #1.3m to #5.1m over
the same period, a CAGR of 98%.



* CVS was established in August 1999, with financial backing from funds
managed by Sovereign Capital Partners LLP, to acquire and operate veterinary
practices which were well established within their local community and had a
reputation for high quality service.



* Based in Diss, Norfolk, the Group operates two divisions: the practice
division composed of 45 small animal practices and one equine specialist
practice (128 individual surgeries throughout the UK) and the diagnostic
division made up of three veterinary diagnostic laboratories which provide
services to CVS and to third parties.



* CVS currently employs 1,214 staff, including 271 vets, as well as using
additional locums, and is the largest national consolidator of veterinary
practices.











Commenting on the start of trading of CVS' shares on AIM, Simon Innes, Chief
Executive of CVS, said:



"The company's admission to the London AIM market and commencement of dealings
is a significant step for CVS. Our business has been built by a strong team of
dedicated professionals who ensure both quality and reputation result in CVS
being highly regarded within the sector.



Becoming a public company is a natural progression for us raising our corporate
profile and securing our continued success in both acquisitive and organic
growth.



I am delighted with the response from investors and look forward to engaging
with the investment community as a quoted company."



For further information contact:


CVS Group plc

Simon Innes, Chief Executive 01379 644 288
Paul Coxon, Finance Director

Panmure Gordon (Nominated Adviser and Broker) 020 7459 3600
Richard Gray
Andrew Godber
Chris Bucknall

Buchanan Communications 020 7466 5000
Richard Oldworth
Suzanne Brocks

Sovereign Capital 020 7828 6944
Kevin Whittle



The information required by Rule 26 of the AIM Rules for Companies (February
2007) is available under the heading AIM Rule 26 within the Investors/Financials
section of the Company's website at www.cvsgroupplc.com.





PLACING STATISTICS


Placing Price 205 pence per share

Number of Ordinary Shares placed on
behalf of Selling Shareholders 45,205,800

Number of Ordinary Shares in issue
immediately following Admission 51,563,475

Market capitalisation of the Company
at the Placing Price #105.7 million

Net proceeds of the Placing to be
received by Selling Shareholders #89.5 million

ISIN GB00B2863827

AIM symbol CSVG





Notes to Editors





Introduction

CVS is one of the leading veterinary service providers in the UK, operating 45
veterinary practices (consisting of 128 individual surgeries) nationwide and
three veterinary diagnostic laboratories. It is the UK's largest employer of
vets with 271 employed, representing 2.2 per cent. of all vets estimated to be
registered and practising in the UK. CVS was founded in 1999 with financial
backing from funds managed by Sovereign Capital Partners LLP with the objective
of consolidating the fragmented UK veterinary services market, and has completed
acquisitions for consideration of approximately #32.1 million to date.


Business Description

The CVS business model is to offer to owner-vets operating under a partnership
structure the chance to realise the value of their asset in a market where
demographic and other changes are creating a situation whereby new younger vets
are now no longer able or inclined to buy into partnerships themselves. The CVS
structure offers to remove the administrative burden from the veterinary
practices it acquires through the provision of central services such as finance,
human resources, marketing, health and safety, information technology and
purchasing, allowing the practice to concentrate on the provision of clinical
care.

CVS now operates 128 surgeries which were acquired in the following periods.


July 99 - July 04 - July 05 - July 06 - July 07 -
June 04 June 05 June 06 June 07 present
Surgeries Acquired 17 12 30 62 7



CVS has also acquired three veterinary diagnostic laboratories, which provide
laboratory services to CVS practices and to third parties. The laboratory
services represent a key saving and growth opportunity to the Group as
additional acquired practices drive incremental diagnostic revenues through the
CVS laboratories. Further scale benefits are accessed through the ability to
obtain favourable terms from suppliers and wholesalers of veterinary supplies,
intra-Group referrals and the operational leverage that the centralised
administration structure brings to the Group as it continues to grow.



Investment Highlights



1. Leading market position

CVS operates 128 individual surgeries across the UK, which is more than twice
the number operated by the nearest competitor. The Directors believe that the
Group has built a reputation in the veterinary profession as the leading
national consolidator, without sacrificing its reputation for working alongside
the profession as a consolidator and not as a predatory competitor.


2. Nationwide Infrastructure

CVS's nationwide network of 128 veterinary surgeries is capable of significant
operational leverage. Efficiency is improved as more administrative services can
be delivered by the head office. Scale also brings benefits in the buying of
drugs and equipment.


3. Organic profit growth

CVS (UK) Limited has demonstrated the ability to extract organic profit growth
from the practices it acquires in the post-acquisition period, over and above
the profit growth attributable to the immediate contribution of those
acquisitions. This is driven by scale efficiencies, operational leverage,
pricing management, collective buying power, and growth in the underlying market
for veterinary care.


4. Growth through acquisition

Consolidation in the UK veterinary market is being driven by demographic changes
in the profession which are creating an opportunity to acquire more practices as
the industry moves from a fragmented partnership structure towards a more
corporate-owned structure. CVS has made 40 separate acquisitions and is
therefore well proven in its ability to assess the attractiveness of potential
new acquisitions and successfully integrate and operate them thereafter.



5. Financially robust

The CVS business model is highly cash generative, with the last three financial
years of trading each benefiting from cash generation through working capital as
a result of strong cash receipts at the point of sale, favourable credit terms
with suppliers and low levels of stock. In addition, property rental costs are
low at under 5 per cent. of revenues, and capital expenditure is also relatively
low. No new money has been raised on Admission through the sale of shares. The
Directors anticipate that the acquisition pipeline will be adequately funded
through a combination of debt finance and internally generated cash flows.









This information is provided by RNS
The company news service from the London Stock Exchange
END

MSCILFITIFLAIID

[ariane] 06/10/2007 08:16

Vet group CVS to join AIM
Fri 05 Oct 2007

LONDON (SHARECAST) - Veterinary services group CVS has raised £92.7m for selling shareholders via a placing that was "comfortably over-subscribed" as part of its planned float on London's AIM next week.

Panmure Gordon has placed 45.21m shares at 205p each, valuing the entire company at £105.7m. Dealing is expected to begin on 10 October.

The group, set up in 1999, said the purpose of the listing is to raise its public profile, help drive new business and to increase awareness of the firm within the veterinary profession.

The float has also provided an opportunity for Nash Sells Limited Partnership II, a fund managed by Sovereign Capital Partners LLP, to realise its investment, having backed CVS from the start.

It says growth in the market for veterinary services in the UK is being driven by a growing and ageing pet population, advances in veterinary medical science, changes in the demographic profile of the human population and growth in the pet insurance industry.

[ariane] 06/10/2007 06:20

Take AIM: Sovereign cashes in with vet group placing Published: 12:13 Friday 05 October 2007
By Douglas Bence, Companies Correspondent

Private equity buy-and-build specialist Sovereign Capital has cashed in its investment in Norfolk-based veterinary group CVS getting out 11.9 times more than it put in.

The company is being floated on AIM with a placing 45.2 million shares at 205p each raising £92.7 million. This represents 87.7% of the capital and makes the group worth £105.7 million at the placing price.

Sovereign backed the company when it was started in August 1999 specifically to acquire and operate well-established veterinary practices in local communities. The company has so far completed 40 separate acquisitions together worth £32.1 million.

Launching on AIM allows Nash Sells Limited Partnership II, a fund managed by Sovereign Capital Partners LLP, to get the return its money after eight years of support.

Traditionally veterinary practices operate as partnerships, but as the industry changes new and younger vets are less keen to buy into partnerships.

'The CVS structure offers to remove the administrative burden from the veterinary practices it acquires through the provision of central services such as finance, human resources, marketing, health and safety, information technology and purchasing, allowing the practice to concentrate on the provision of clinical care,' said the company.

CVS, which operates out of Diss in Norfolk, is keen to get new business and wants to raise the awareness of the group. It believes its strategy for growth, both organically and through acquisition, will be more readily achieved as a quoted company.

It employs 1,214 staff, 271 of them vets, and has two divisions: the veterinary side, which comprises 45 small animal practices with 128 surgeries and one specialist equine practice, and the diagnostic side which has three laboratories.

Already it has more than twice the number of surgeries operated by its nearest competitor, the group says, and is the largest employer of vets in the UK with around 2.2% of the estimated total.

Sales have increased to £39 million in the year to 30 June from £12.8 million in 2005. Earnings before interest, tax, depreciation and amortisation rose to £5.1 million from £1.3 million.

Future deals, typically for practices with a minimum of four vets and an annual turnover of at least £500,000, will be funded through a combination of a £12 million undrawn debt facility with the Royal Bank of Scotland and Barclays, and cash flow. It is currently looking at 15 different practices.

The management team is headed by chief executive Simon Innes, formerly of the optical group Vision Express, finance director Paul Coxon, who came form the ABF subsidiary Allied Grain (South), and group operations director Mark Finn, who moved from the Co-op Group Pharmacy and was previously a regional business manager at Sainsburys.

Three non-executives directors have joined the board, Richard Connell, David Timmins, Christopher Marsh, who have each agreed to invest £100,000 in shares at the placing price.

As for the market in which it operates, veterinary medical science, like medicine generally, is advancing fast. Britain also has long had a reputation for being a nation of animal lovers.

CVS says that as the population ages, more people want pets as companions and with the growth in the pet insurance industry they are more likely to be properly looked after. The cat population, for example, has increased from 7.7 million in 2003 to the current 9.9 million.

Dealing in the shares starts Wednesday.

Citywire Verdict:
No new money is being raised which is why future acquisitions will be financed partly by cash flow. So this is probably not an issue to rush into if you are interested in dividends as these will not commence until the board feels it is 'appropriate and practicable.' Wait.

[ariane] 06/10/2007 06:16

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