21st Mar 2016 09:50
LONDON (Alliance News) - Tavistock Investments PLC on Monday said it has entered into an agreement to buy Abacus Associates Financial Services Ltd for GBP5.2 million in a cash and shares deal.
Shares in Tavistock Investments were trading up 25% at 4.21p on Monday morning.
Abacus is headquartered in Hereford in North West England and will join Tavistock as a subsidiary company on April 1. It made a pretax profit of GBP781,000 for the year ended January 31, and revenue of GBP4.5 million.
Tavistock will pay GBP4.2 million at completion, GBP2.5 million of which will be in cash, GBP0.1 million through the adoption of a debt obligation, and GBP1.5 million through the issue of 20 million Tavistock shares at 7.5 pence each. A further GBP1 million will be settled in cash on the first anniversary of completion.
In addition, if Tavistock's share price hasn't risen to 7.5p or greater in July 2018, a further consideration may be payable in cash.
The acquisition will be financed using Tavistock's existing resources, together with the proceeds of a share subscription and a new debt facility.
Under the share subscription, Tavistock has received irrevocable undertakings to subscribe for 24.6 million shares at 3.3p each. Chief Executive Brian Raven will subscribe for 1.5 million shares and Chairman Oliver Cooke will subscribe for 461,539 shares.
Following this, Raven will hold 16.5 million shares, representing 4.9% of the company's issued share capital, and Cooke will hold 2.1 million shares, representing 0.6% of the company's issued share capital.
Tavistock has also entered into a new three-year GBP2 million debt facility with Assetz SME Capital Ltd. Interest is to be paid monthly at a rate of 9% and repayment of the principal sum will be made at the end of the term.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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