Gateley (Holdings) PLC Acquisition of Tozer Gallagher LLP

TIDMGTLY

Gateley (Holdings) PLC

23 July 2021

23 July 2021

Gateley (Holdings) Plc

("Gateley" or the "Group")

(AIM:GTLY)

Acquisition of the Business and Assets of Tozer Gallagher LLP

("Tozer Gallagher")

Gateley, the legal and professional services group , is pleased to announce the acquisition by Gateley Vinden Limited of the business and assets of Tozer Gallagher LLP, a leading practice of chartered quantity surveyors and construction consultants, for a total maximum consideration of GBP700,000, plus an amount equal to the book value of the assets acquired (the "Acquisition") , expected to be approximately GBP115,000.

Tozer Gallagher will join the Gateley Vinden business, which the Group acquired in March 2020. This strategic Acquisition adds further strength and depth to the Group's Property Platform and is the tenth business that Gateley has acquired since its IPO in 2015.

Background to Tozer Gallagher

Tozer Gallagher was founded over 30 years ago and is a nationally recognised and highly respected practice of chartered quantity surveyors and construction consultants based in Manchester and London. The business specialises in built environment consultancy, fund monitoring services, and surety advisory.

The Tozer Gallagher team, headed by Directors Bill Ibram, Anthony Meaden and Paul Rigby, are well known to Gateley Vinden and Gateley Legal, having previously collaborated on a number of projects. All three Directors will continue to work as part of the management team of Gateley Vinden incorporating Tozer Gallagher.

Tozer Gallagher's clients include QBE, Euler Hermes, Aviva Insurance and Bank ABC, as well as a number of councils, education trusts and social housing providers across the UK. In the year ending 31 May 2021, Tozer Gallagher produced revenues of circa GBP1m.

Acquisition rationale

The Acquisition will enable Gateley Vinden to widen the scope of its existing built environment consultancy and fund monitoring services.

The surety advisory expertise within Tozer Gallagher adds further strength to Gateley Vinden's business but also complements the specialist surety work undertaken by Gateley Legal's surety practice team. The internationally recognised experts within Gateley Legal's surety team have a proven track record in advising on contentious and non-contentious issues, relating to any surety.

Terms of the acquisition

Under the terms of the Acquisition agreement, Gateley will pay a total maximum consideration of GBP700,000 plus an amount equal to the book value of the assets acquired. The initial payment on completion will be approximately GBP600,000, payable in cash. The three Tozer Gallagher Directors will each subscribe GBP100,000 for in aggregate 142,179 new ordinary shares of 10 pence each in the capital of Gateley ("Ordinary Shares") at a price of GBP2.11 per Ordinary Share, such share subscription being equal to approximately 50% of the cash consideration payable on completion. The book value of the assets acquired by Gateley Vinden Limited shall be agreed and determined after completion of the Acquisition but is expected to be approximately GBP115,000 and in any event is capped at GBP125,000.

Deferred consideration of up to GBP100,000 is payable based on the acquired business' financial performance in the 12 month period following completion of the Acquisition. Deferred consideration will be settled in cash, with each recipient applying 50% of their deferred consideration in subscribing for Ordinary Shares, valued at the average 30-day closing price of an Ordinary Share on the last practicable date as the deferred consideration falls due.

The cash consideration is being funded out of the Group's existing resources. The Board expects the Acquisition to generate operational synergies and be immediately earnings enhancing.

Issue of new Ordinary Shares

Further to the subscription referred to above, 142,179 Ordinary Shares are to be issued. Application will be made to the London Stock Exchange for the 142,179 new Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will take place at 8.00 a.m. on 28 July 2021.

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in issue. Following Admission, Gateley's total issued share capital will comprise 118,118,551 Ordinary Shares. This number may be used by shareholders in Gateley as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of Gateley under the FCA's Disclosure Guidance and Transparency Rules.

Commenting on the Acquisition, Rod Waldie, Chief Executive Officer of Gateley, said:

"I am delighted to welcome Tozer Gallagher to the Group. The Tozer Gallagher team has worked with many of our colleagues in Gateley Legal and Gateley Vinden and we know there are many opportunities to collaborate further. We also have a shared interest in surety work and regularly work with the same clients, so this is an area where we see further growth potential.

"This Acquisition sits within the diversification part of our strategy to establish complementary services that support our Platform strategy. We believe there is also an opportunity for Gateley Vinden, incorporating Tozer Gallagher, to collaborate further within our well-established Property Platform and we are looking forward to supporting their future development in line with our growth plans."

- Ends -

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July 23, 2021 02:00 ET (06:00 GMT)