Coral Products PLC Acquisition and Placing (6691P)
22 February 2016 - 7:01AM
UK Regulatory
TIDMCRU
RNS Number : 6691P
Coral Products PLC
22 February 2016
22 February 2016
CORAL PRODUCTS PLC
("Coral" or the "Company")
ACQUISITION AND PLACING
Acquisition of the entire issued share capital of Global One-Pak
Holdings Limited
Placing of 13,750,000 new ordinary shares at 20 pence per share
raising GBP2.75 million
Coral Products plc, a specialist in the design, manufacture and
supply of injection moulded plastic products based in Haydock,
Merseyside, is pleased to announce that it has conditionally
acquired the entire issued share capital of Global One-Pak Holdings
Limited ("GOP") for a minimum consideration of GBP3.60 million
("Acquisition"), comprising GBP2.95 million to be satisfied in cash
and GBP0.65 million to be satisfied by the issue of 3,250,000 new
ordinary shares to the vendors of GOP ("Vendors") at a price of 20
pence per share ("Consideration Shares").
The cash consideration for the Acquisition is being satisfied
from:
(i) GBP0.40 million of free cash available at GOP, such funds
becoming payable to the Vendors pursuant to the terms of the share
purchase agreement between the Vendors and the Company ("SPA") as
to GBP0.30 million upon completion of the Acquisition and GBP0.10
million on the date falling 90 calendar days after the date of
completion of the Acquisition; and
(ii) GBP2.55 million of the proceeds of a placing of 13,750,000
new ordinary shares in the Company at a price of 20 pence per share
("Placing Shares") with new and existing investors (the "Placing")
to raise GBP2.75 million for Coral before expenses of approximately
GBP0.20 million. The Placing was conducted through Daniel Stewart
& Company Limited, the Company's broker, and was
oversubscribed.
In addition to the consideration of GBP3.60 million detailed
above, an earn-out consideration shall become payable to the
Vendors in the event that GOP's EBITDA for the year ended 31
December 2016 ("2016 EBITDA") exceeds GOP's EBITDA for the year
ended 31 December 2015 ("2015 EBITDA") ("Earn-Out Consideration").
If triggered, the Earn-Out Consideration shall be equivalent to 2.5
times the difference between 2016 EBITDA and 2015 EBITDA and shall
be payable by the date no more than 20 business days after the date
on which 2016 EBITDA is agreed ("Due Date") via the issue of new
ordinary shares in the Company at a price determined by the average
closing mid-market price in the Company's ordinary shares for the
five business days prior to the Due Date. The Company will make a
further announcement in due course once it has been determined
whether any Earn-Out Consideration is payable.
GOP designs, manufactures and supplies lotion pumps and trigger
sprayers to a broad range of customers worldwide, including a
number of global brands, across a wide range of markets, including
household and garden, automotive, personal care and pet grooming.
GOP, which is based in Manchester, approximately 35 miles from
Coral's manufacturing facility in Haydock, will continue to operate
from its existing premises.
In the year ended 31 December 2015, GOP's audited sales and
EBITDA were approximately GBP2.89 million and GBP0.64 million
respectively. The audited net asset value of GOP as at 31 December
2015 was GBP1.10 million. Pursuant to the terms of the SPA, the
Vendors have given warranties and indemnities in favour of the
Company.
Joe Grimmond, Chairman of the Company, commented: "The
acquisition of GOP is a significant milestone for Coral as it
expands further the group's market coverage and product range. The
board anticipates that the Acquisition will be earnings enhancing
in its first year and that Coral's progressive dividend policy may
continue without the group's gearing exceeding 35%."
Application has been made to the London Stock Exchange for the
Placing Shares and the Consideration Shares (which, in aggregate,
comprise 17,000,000 new ordinary shares) to be admitted to trading
on AIM. It is expected that admission will become effective and
that dealings in 16,500,000 new ordinary shares (comprising the
Consideration Shares and 13,250,000 of the Placing Shares) will
commence at 8.00 a.m. on 26 February 2016. The balance of 500,000
Placing Shares will be admitted to trading on 3 March 2016.
The issued share capital of the Company upon admission of all of
the Placing Shares and the Consideration Shares will be 82,614,865
ordinary shares of 1 penny each. The above figure of 82,614,865
should 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 Disclosure and Transparency Rules.
Following completion of the Acquisition and the Placing, Miton
Group plc, which is an existing substantial shareholder in the
Company and an investor in the Placing, will have a beneficial
interest in 16,515,555 ordinary shares in the Company, representing
19.99 per cent. of the Company's enlarged share capital.
For more information on Coral and GOP, please visit the
following websites:
www.coralproducts.com
www.one-pak.co.uk
Enquiries
Coral Products plc Tel: 07703
Joe Grimmond, Executive Chairman 518 148
Nominated Adviser
Cairn Financial Advisers LLP Tel: 020 7148
Avi Robinson / Tony Rawlinson 7900
Broker
Daniel Stewart & Company Limited Tel: 020 7776
David Lawman / David Coffman 6550
Capital Markets Consultants Limited Tel: 07515
Richard Pearson 587184
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQUAABRNSAUUAR
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February 22, 2016 02:00 ET (07:00 GMT)