6th Jun 2016 06:46
LONDON (Alliance News) - Swallowfield PLC on Monday said it is buying fellow beauty and personal-care product developer The Brand Architekts Ltd for GBP11 million in cash.
Swallowfield raised GBP8.6 million through a placing of shares at 155 pence each in order to fund the acquisition. The company's shares closed at 165.80p on Friday.
The remaining balance will be funded by a new debt facility with HSBC Bank PLC.
Swallowfield will make an initial payment of GBP9.2 million, with the remaining GBP1.9 million to be paid on the first anniversary of completion.
Non-Executive Chairman Brendan Hynes has subscribed for 24,914 shares, taking his total holding to 74,914 shares representing 0.4% of Swallowfield's issued share capital.
Chief Executive Chris How has subscribed for 29,977 shares, taking his total holding to 89,977 shares representing an 0.5% stake.
Finance Director Mark Warren has subscribed for 10,930 shares, giving him a total interest in 33,030 shares or 0.2%.
Sales & Marketing Director Jane Fletcher has subscribed for 12,374 shares, increasing her stake to 37,374 shares.
Finally, Non-Executive Director Roger McDowell has subscribed for 273,189 shares, increasing his stake to 344,189 shares, which represents 2.0% of the company's issued share capital.
In its financial 2016 year, Brand Architekts made a revenue of GBP10.7 million and pretax profit of GBP2.0 million. Swallowfield expects the acquisition to be immediately earnings accretive.
"Brand Architekts has built a very successful stable of brands that will complement our developing owned brand business. By combining the two businesses we believe that we can leverage both existing skill sets, including product development, research and development, supply chain, digital marketing, and online sales, to the benefit of all stakeholders," Swallowfield CEO How said in a statement.
"It further strengthens our business model of building two complimentary value streams (core contract manufacturing and owned brands) on one single common capability platform," he added.
Swallowfield added that it is continuing to trade in line with market expectations for its financial year to end June.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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