19th Jul 2016 10:00
LONDON (Alliance News) - Treatt PLC said on Tuesday the valuation of Earthoil Group's earn-out was "extremely disappointing", but a "significant step" in moving on from the dispute.
Treatt acquired Earthoil, a maker of fragrant oils, in 2008. The sellers of Earthoil filed a claim against Treatt in 2012 relating to the deferred consideration payable to them. Last year the matter was referred to expert determination to resolve the matter.
The expert determination process concluded the value of the earn-out to be GBP970,648. Treatt said it was "pleased" this amounted to less than the sum demanded by the Earthoil sellers, but still "extremely disappointed" with the outcome.
Taking into account earlier payments and a contribution of GBP11,730 towards the sellers' fees for the expert determination process, the resulting amount now owed by Treatt is GBP414,378.
While this resolves the majority of the earn-out claim, the company said there remain some outstanding issues which are yet to be determined. Treatt said the final resolution of these matters is unlikely to be reached before 2017.
"This outcome is extremely disappointing. We have received consistent legal advice throughout this process in respect of our position. Nonetheless, this issue has been hanging over the company for some years, and this is a significant step to putting this matter behind us and moving on," said Daemmon Reeve, Treatt chief executive.
Treatt, which makes flavour and fragrance ingredients for the food industry, said Earthoil profits have grown consistently from a loss-making position in 2008 to a pre-tax profit of almost GBP1 million in the year to September 2015.
Shares in Treatt were down 0.6% on Tuesday at 174.00 pence.
By Lucy Heming; [email protected]
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