Business
Acquisition
Acquisition.
About this update from Hargreaves Services Plc
[{"type":"text","content":"\n \nRNS Number : 3723L Hargreaves Services PLC 11 January 2016 \n\n\n\n\n\nFor immediate release\n\n\n11 January 2016\n\n\n\n\n \nHargreaves Services plc\n(\"Hargreaves\", \"the Group\" or \"the Company\")\nAcquisition\nHargreaves Services plc (AIM: HSP), the UK's leading supplier of solid fuels and bulk material logistics, is pleased to announce the acquisition of C A Blackwell Group Limited (\"Blackwell\") for a consideration of up to £11.85m. The consideration will be settled by a net cash payment of £8.5m and the transfer to the Blackwell shareholders of a property at Earls Colne with a market value of £3.35m. The property was owned by Blackwell.\nOf the £8.5m net cash payment, £5.25m will be held in escrow pending the settlement of a number of historic claims and the realisation of proceeds from the disposal of two other investment properties, which will be marketed post-acquisition and have a book value of £6.5m. These property disposals are expected to be completed by 31 December 2016.\nBlackwell has been operating in the field of bulk earthmoving and civil engineering for over 50 years. In addition to having a leading reputation in earthworks and civil engineering, Blackwell also operates a number of mining and quarrying services contracts. The operations of Blackwell are highly complementary to those of Hargreaves in terms of skills, experience and, critically, the equipment that they utilise. In the opinion of the Directors, the integration of Blackwell into Hargreaves creates new and exciting opportunities to deploy one of the largest heavy plant fleets in Europe within a large and well-funded Group.\nBased on unaudited management accounts and forecasts, in the year ended 31 December 2015 Blackwell is expected to generate an operating profit of £3.3m on £89.0m of revenues. Included within these amounts are £1.2m of operating profit and £12.2m of revenue relating to exceptional non-recurring activity. Excluding these exceptional non-recurring profits, adjusted EBITDA for the period is expected to be approximately £4.1m. \nThe net assets of Blackwell at the date of acquisition after the disposal of the Earls Colne property are expected to be approximately £10.9m. The net debt of Blackwell at the date of the transaction, adjusted for normal working capital levels, was £13.0m, giving a headline enterprise valu...