TIDMSID
RNS Number : 2141M
Silverdell PLC
11 August 2011
Silverdell PLC
("Silverdell" or "the Company")
Acquisition of RDS and Placing
Silverdell Plc (AIM: SID), the Specialist Environmental Support
Services group, is pleased to announce that it has conditionally
acquired RDS Asbestos Management Consultants [UK] Limited ("RDS"),
a leading asbestos consultancy, for a total maximum consideration
of GBP2.3m. Silverdell Plc also announces its intention to place
23.635m new shares at 10p each, raising GBP2.364m. Of the placing
proceeds, GBP1.2m will be used to finance the initial cash
consideration and working capital requirements of RDS whilst the
remaining funds will provide working capital to support growth and
fund opportunistic bolt-on acquisitions.
The acquisition and placing are subject to approval of
shareholders at a General Meeting, which will be held on at 11.00
a.m. on 30 August 2011 at the offices of finnCap, 60 New Broad
Street, London, EC2M 1JJ. Subject to shareholder approval,
admission of the placing shares is expected to occur on 31 August
2011.
Acquisition Highlights
- RDS has a blue chip customer base, particularly in the retail
sector, complementing Silverdell Plc's existing asbestos
consultancy business, Redhills, which specialises in the industrial
and commercial sectors
- RDS' unaudited accounts for year ending 30 June 2011 show
GBP2.7m revenue, GBP300k profit before tax
- Consideration of up to GBP2.3m: initial consideration of
GBP1.45m (GBP895k cash and GBP555k shares), working capital of
approximately GBP300k and an earnout of GBP600k in cash dependent
on performance targets
- Expected to be earnings enhancing within the year ending
September 2012
- Enhances consultancy coverage across East Anglia
- Managing Director of RDS and key personnel to be retained
- Broadens consulting offering; strong synergies and
cross-selling opportunities identified
- Fits in with Silverdell Plc's stated strategy of changing
focus from asbestos removal contractor to Specialist Environmental
Support Services group, focusing on high quality contracts with
blue chip and public sector clients
Placing
- Conditional Placing of 23.635m shares at 10p, raising
GBP2.364m (before costs)
- Increases the equity base by 16%
- Has the support of major shareholder Marwyn
- Use of proceeds:
o GBP1.2m - initial cash consideration for RDS and working
capital
o Up to GBP1.1m - working capital to support growth and fund
opportunistic bolt-on acquisitions
Sean Nutley, CEO of Silverdell Plc, said:
"This acquisition is exactly in line with our stated strategy of
growing our business by expanding our service offering and focusing
on longer term framework contracts directly for major blue chip
customers. RDS, which operates predominantly in the retail sector
of that market brings complementary skills and geographic coverage,
enhancing our competitive advantage.
We have already identified synergies and efficiencies by the
better utilisation of resources. We believe this acquisition will
add considerably to our ability to win significant contracts
directly for clients in our target markets and provide the
opportunity to further benefit our customers through efficiencies
gained by our comprehensive service offering. The acquisition is
expected to be earnings enhancing within the year ending September
2012. The placing proceeds will also support our strategy for
continued organic growth and enable us to take advantage of other
strategic opportunities as they arise."
Rationale for the acquisition
The Specialist Environmental Support Services industry is
underpinned by strong regulatory growth drivers. Companies face
ever more stringent legal requirements to remediate and manage
hazardous waste such as asbestos, both in the UK, and increasingly,
internationally. There is also a strong trend of blue chip
companies increasing their spending on CSR and health and safety
measures. Clients are increasingly seeking to engage a "one stop
shop" Environmental Support Services provider which can offer all
solutions from consulting to remediation and removal. As previously
stated, Silverdell Plc is seeking to grow and broaden its service
offering by acquisition as well as by organic growth, in all areas
of Specialist Environmental Support Services.
Information regarding RDS
RDS is a well-established, privately owned asbestos consultancy
based in East Anglia with a blue chip client base focused on the
retail sector (high street retailers, pub chains, restaurants and
bookmakers). Its top five customers make up 75% of revenues. The
company recently signed a significant 3 year agreement with its
largest customer, boosting the order book to around 72% of ongoing
turnover. It has a total of 33 employees, and for the year ended 30
June 2011 reported unaudited results of GBP2.7m in revenue and
GBP300k in PBT, generating an EBITDA margin of 11%. It has a long
established working relationship with and a complementary customer
base to the Silverdell Group, whose consultancy operation Redhills,
has tended to be stronger in industrial and commercial areas.
Following the acquisition, Silverdell's client base, geographic
coverage and consulting capabilities will be considerably
strengthened, placing the Group in a strong position to win more
and larger contracts across all sectors. RDS has a strong and
complementary culture to Silverdell, and compelling synergies and
cross-selling opportunities have already been identified. Key
personnel will be retained, as will the previous owner and Managing
Director, on a consulting basis to facilitate a smooth integration.
The acquisition is expected to be earnings enhancing within the
year ending September 2012.
Consideration
Silverdell Plc has agreed to acquire RDS for a total
consideration of up to GBP2.3m. The initial consideration will be
GBP1.45m, comprised of GBP895k cash and GBP555k shares. Up to
GBP300k of additional working capital will also be required. An
earnout of a further GBP600k in cash is dependent on the
achievement of stretched performance targets. The acquisition is
being achieved on an exit multiple of 3.5x EBITDA.
The circular to shareholders will be made available on the
Company's website,
http://www.silverdell.plc.uk/investor-relations.
11 August 2011
ENQUIRIES:
Silverdell Plc Tel: + 44 20 7389 6827
Sean Nutley, Group Chief Executive
Ian Johnson, Group Financial
Director
finnCap Tel: + 44 20 7600 1658
Marc Young
Ben Thompson
College Hill Tel: + 44 20 7457 2020
Helen Tarbet
This information is provided by RNS
The company news service from the London Stock Exchange
END
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