11th Jul 2007 07:00
Albemarle & Bond Holdings PLC11 July 2007 Albemarle & Bond Holdings plc Acquisition and share placing Albemarle & Bond Holdings plc ("Albemarle & Bond") today announces it has agreed terms to acquire Herbert Brown & Son Limited ("Herbert Brown"), the independent jeweller and pawnbroking chain based in the North of England. Summary of key points • Total consideration of £30.758 million, including the acquisition of freehold property valued at £3,047,000, which will be immediately sold reducing the net purchase consideration to £27.711 million• Net consideration to be satisfied through a cash payment of £26.745 million (funded in part by a vendor placing at £2.20 per share, of 1,476,328 new ordinary shares ("the Vendor Placing")) and the issuance of 1,824,126 new ordinary shares ("Consideration Shares")• In the year ended 31 March 2007 Herbert Brown reported audited operating profit of £3.2 million from turnover of £13.7 million• Number of shops operated by Albemarle & Bond to increase from 86 to 112• Pawn-loan book of the enlarged business to exceed £21 million, an increase of 30 per cent. on Albemarle & Bond's current book• Acquisition provides strong strategic fit with Albemarle & Bond's existing operations and expected to be immediately earnings enhancing Herbert Brown operates a network of 26 branches in the North of England offering retail and financial services. The key management of Herbert Brown will remain with the business following the acquisition. Herbert Brown's retail sales operation focuses on the second hand jewellery market where it has gained recognition as being a market leader. Retail sales, excluding scrapping, in the year ended 31 March 2007 amounted to £8.8 million. Financial services offered in Herbert Brown branches include pawnbroking, cheque cashing and pay day advances. At 31 March 2007 Herbert Brown had audited net assets of £10.1 million excluding the freehold property referred to above, which will be leased back to the business at an annual rental of £168,500. The cash component of the consideration will be funded in part through a new £21 million facility made available to Albemarle & Bond by its existing bank. The facility will also be applied to refinance the acquisition of two London stores acquired during June 2007 in an unrelated transaction. Placing EZ Corp Inc, an existing substantial shareholder in Albemarle & Bond, has undertaken to subscribe for 3,022,209 new ordinary shares ("EZCorp Shares") at £2.20 per share. In addition 1,023,672 new ordinary shares ("Placing Shares") have been placed by Collins Stewart Europe Limited on behalf of Albemarle & Bond with institutional investors (in addition to the Vendor Placing) at the same price and the net proceeds used to part fund the cash consideration. The Consideration Shares will be subject to a 12 month lock-in whereby they cannot be sold without the prior consent of Albemarle & Bond. The acquisition is conditional on admission of the Consideration Shares, Placing Shares and EZCorp Shares to trading on AIM and an application for admission will be submitted shortly. Current Trading Strong growth in pawnbroking has continued throughout the year and 11 stores have been added bringing the total number to 86, prior to the acquisition of Herbert Brown. The result for the year is expected to be in line with consensus market expectations, allowing for the affect of new openings and exceptional costs resulting from the exercise of share options from which in turn Albemarle & Bond will derive a tax benefit. Commenting on the acquisition, Albemarle & Bond's Chief Executive Greville Nicholls said "In Herbert Brown we have acquired an outstanding business, which is well respected for both its pawnbroking and retailing operations. Its expertise in second hand jewellery retailing will be of particular benefit to the enlarged group as we continue to seek growth in all areas of our business." Chris Brown, Director of Herbert Brown & Son said "we have been impressed by Albemarle & Bond's significant and sustained growth over many years and we are delighted by the transaction which we see as the next step forward in our expansion into this exciting market". EnquiresAlbemarle & BondCharles Nicolson, Chairman T: +44 (0) 117 933 3213Greville Nicholls, Chief Executive T: +44 (0) 118 955 8100David Pattinson, Finance Director T: +44 (0) 118 955 8100 Josceline Grove Public Relations Consultant T: +44 (0) 1798 344500 Smith & Williamson Corporate Finance LimitedNick Reeve T: +44 (0) 117 933 3344 END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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