24th Jun 2015 08:31
LONDON (Alliance News) - Injection-moulded plastic products manufacturer Coral Products PLC said it has struck a deal to acquire certain injection moulding, extrusion blow moulding and injection blow moulding plant and machinery from Neiman Packaging Ltd in a GBP500,000 cash deal.
The payment for the assets comprises a GBP300,000 initial consideration, plus a further GBP200,00 earn-out based on the revenue generated by the assets.
Neiman has used the assets to make a range of packaging products for customers in the health, hygiene and personal care markets. The assets will be installed as two new production lines at Coral's Haydock manufacturing plant.
The acquisition and a related working capital facility will be funded by means of existing bank facilities, plus by a share subscription. The subscription will involve the issue of 1.75 million new Coral shares at 13.5 pence per share and will be run by Daniel Stewart & Co.
Coral Products shares were untraded after the news on Wednesday, having last traded at 14.00 pence.
"We are delighted to have the opportunity to acquire such quality assets, with which we have acquired the capacity for producing a range of proprietary packaging products that are currently sold to a substantial number of customers that will be new to Coral across a number of growth sectors," said Coral Chairman Joe Grimmond.
"We expect that the acquisition will make a significant contribution to sales and profitability in the current financial year," Grimmond added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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Related Shares:
Daniel Stewart Securities PlcCoral Products