LONDON: Coral Products plc has acquired the entire issued share capital of Customised Packaging Limited (CPL) for a net consideration of £1.25 million.
The acquisition consideration comprises £883,956.25 to be satisfied in cash and £366,043.75 to be satisfied by the issue of 3.327 million new ordinary shares to the vendors of CPL at a price of 11 pence per share.
The cash consideration for the acquisition is being satisfied from Group’s existing resources.
In addition to the consideration of £1.25 million detailed above, an earn-out consideration shall become payable to the Vendors in the event that CPL’s profit before tax for the year ended 31 December 2021 is greater than two hundred and fifty thousand pounds.
If triggered, the Earn-Out Consideration shall be equivalent to 30% of profits in excess of two hundred and fifty thousand pounds for the period 1 January 2021 to 31 December 2021 (capped to £250,000) and shall be payable by the date no more than 20 business days after the date on which 2021 profit before taxation is agreed (Due Date).
CPL designs, manufactures and supplies plastic products using their top of the range sheet extrusion technology and vacuum forming capability to a range of a blue-chip customer’s own design specifications. CPL, which is based in Manchester will continue to operate from its existing premises.
As per the unaudited management accounts, in the year ended 31 December 2020, CPL’s sales were circa £2.3 million and the net asset value was £0.7 million. Pursuant to the terms of the share purchase agreement, the Vendors have given warranties and indemnities in favour of the Company.
Application will be made to the London Stock Exchange to admit the Consideration Shares to trading on AIM. Admission of the Consideration Shares is expected to occur on or around 8 March 2021. The new ordinary shares will rank pari passu with the existing ordinary shares.
In conformity with DTR 5.6.1, the Company notifies that, as at the date of this announcement, it has a single class of shares in issue being Ordinary Shares and the total number of Ordinary Shares in issue is currently 82,614,865.
There are no Ordinary Shares held in treasury. Each Ordinary Share entitles the holder to a single vote at general meetings of the Company. Following Admission, the enlarged issued share capital of the Company will comprise 85,942,534 ordinary shares of 1 pence each.
Joe Grimmond, Chairman of the Company, commented: “The acquisition of CPL is a significant milestone for Coral as it expands further the Group’s market coverage and product range. The Board anticipates that the Acquisition will be earnings enhancing in its first year.”
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