3rd Sep 2019 11:56
(Alliance News) - Shares in Stirling Industries PLC were suspended on Tuesday after the company said that it was in advanced discussions to acquire its first operating asset.
Should the acquisition of the undisclosed business take place, it would constitute a reverse takeover under AIM stock market rules.
The acquisition vehicle said that so far, it has concluded due diligence on the asset, coming to the conclusion that the asset would be a fit for Stirling's investment criteria.
Headline terms for the transaction have been agreed to, while debt funding has been agreed in principle with the proposed lending banks now credit approved and necessary documentation in near-final form.
Stirling is now looking to raise equity funding for the acquisition, with the size and pricing to be announced in a admission document that will be published in due course. Also, the acquisition will be conditional on shareholder approval at its general meeting on September 30.
In a separate announcement, Stirling reported a pretax loss of GBP4.3 million for the period from February 13, 2018, to March 31, 2019.
"During the period, we have reviewed a significant number of acquisition opportunities operating across the UK, European and US markets, in all cases focusing on industrial businesses with strong fundamentals that are not fulfilling their true potential," said Chair Robin Williams
"The marketplace for the kind of assets we are targeting remains competitive with a limited number of high-quality opportunities available. The business for which we are in advanced negotiations is an excellent example and we are excited by the opportunities which lie ahead both for this potential investment and for the Stirling vehicle," Williams added.