16th Sep 2019 12:15
(Alliance News) - Professional services group Rosenblatt Group PLC said Monday it has acquired sell-side corporate finance boutique Convex Capital Ltd for GBP22 million in total and will change its own name to reflect the significance of the deal.
Rosenblatt will make an initial payment of GBP13.6 million, of which GBP7 million will be in cash and GBP6.6 million satisfied by the issue of 5.5 million shares at a price of 120 pence each.
The stock was up 4.5% at 92.50 pence on Monday at midday.
This leaves deferred consideration of GBP8.4 million, of which GBP1.8 million will be in cash, and the remaining GBP6.6 million paid for by the issue of 4.7 million shares at a minimum price of 140 pence per share.
The deferred shares will only be issued if Convex passes an earnings before interest, taxes, depreciation and amortisation threshold of GBP6 million for the period from September 16 to the same date in 2020.
The acquisition of Convex is expected to be immediately earnings-enhancing for Rosenblatt, it said, and will generate a regular flow of fee-based work for the group's corporate division.
As the group becomes a broader supplier of professional services, Rosenblatt will change its name to RBG Holdings PLC, with effect on Tuesday.
"Convex is an exciting and successful business, which shares with Rosenblatt a focus on high-margins and cash generation. Like Rosenblatt, it is an entrepreneurial company with a proven ability to create markets where none have existed. We also share a similar client base, often working with entrepreneurs. We have had the pleasure of working with Mike and the Convex team over several years and know there is a strong cultural fit between the two organisations," said Chief Executive Officer Nicola Foulston, referring to Convex Chair Mike Driver, who set up Convex in 2011.
Rosenblatt will publish its interim results on Wednesday next week.
Related Shares:
Rbg Holdings