14th May 2014 09:05
LONDON (Alliance News) - Development Securities PLC Wednesday said it has agreed to acquire Cathedral Group Holdings Ltd for an initial consideration of GBP20.9 million to be settled in cash and shares, with additional deferred and contingent consideration to be paid at a later date under certain circumstances.
Development Securities said the total consideration is expected to be up to GBP27.4 million based on the current business plan.
Cathedral Group Holdings is a privately owned Greater London and South East of England specialist mixed-use regeneration developer.
Under the terms of the acquisition, Cathedral's portfolio of nine mixed-use development opportunities will be added to Development Securities' portfolio. These include seven projects totalling over 4.5 million square feet.
The initial consideration of GBP20.9 million consists of GBP11.5 million in cash and GBP6.0 million in new shares at 233.5 pence per share. This equates to 2.6 million shares. These shares will be "locked up" for a 42 month period, subject to limited customary expectations, following completion.
A non-conditional deferred consideration of GBP3.4 million, also included within the initial consideration total, will be paid in cash in instalments of GBP1.2 million in May 2015 and GBP2.2 million in May 2016.
The property firm said a further GBP2.5 million of deferred consideration will also be paid when the acquisition of one of the development assets is completed.
In addition, a contingent consideration of GBP4.0 million may be payable in respect of two of the projects, Preston Barracks and Morden Wharf, dependent on the performance of these projects and the overall returns generated from across the portfolio of Cathedral projects acquired.
Development Securities shares were quoted up 0.2% at 230.25 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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