LONDON: REACT Group announced the acquisition of Fidelis Contract Services Ltd, a successful commercial cleaning, hygiene and facility support services company headquartered in Birmingham providing services to customers across England and Wales.
REACT SC Holdings Limited, a wholly owned operating subsidiary of REACT, has entered into an agreement to acquire the entire issued share capital of Fidelis for an initial consideration of £1.70 million.
The cash element of the initial consideration has been satisfied from the Group’s existing cash resources.
The total consideration payable is capped at £4.75 million on a cash free and debt free basis with normalised working capital.
Mark Braund, Executive Chairman of REACT, commented: “We are delighted to announce the acquisition of Fidelis today, our maiden acquisition and an important milestone in our stated goal to become the country’s most trusted name in the provision of specialist cleaning, decontamination and hygiene services. The acquisition is expected to be immediately earnings enhancing and leaves REACT well positioned to continue to increase market share.
“We have structured the acquisition such that the deferred consideration is linked to the EBITDA performance of Fidelis. We therefore intend to fund any further consideration payable from a combination of existing resources and cash generated by the enlarged REACT group post acquisition.
“The combination of our recent organic growth and the Fidelis acquisition leaves us well positioned to deliver material growth in the current financial year.
“We welcome Lloyd and the Fidelis team into the REACT group and look forward to working with them.”
Fidelis provides services ranging from daily housekeeping and washroom hygiene services through to building and caretaker services. It also provides specialist services such as kitchen and duct cleaning, industrial deep cleaning, pest control and barrier matting for flooring in buildings. Fidelis provides services to a diverse range of sectors with a particular strength in education, healthcare and associated industries.
Fidelis was founded by Lloyd Ansermoz over 10 years ago. Lloyd Ansermoz will remain a shareholder in the enlarged business and, along with his colleagues at Fidelis, an integral part of the management team going forward. Fidelis was majority owned by Lloyd Ansermoz and his wife Naomi.
The Group’s strategy for growth is to build a leading position in the provision of specialist cleaning, decontamination and hygiene services through organic growth and strategic acquisitions.
The businesses of Fidelis and REACT complement each other, providing expertise and operational strength in their respective specialisms in sectors strategically important to both companies. The combination of both REACT and Fidelis represents a unique consolidation of services, that the enlarged business will seek to develop with its customers.
REACT SC has issued loan notes to the vendors of Fidelis for an amount totalling £85,422 and with a coupon of 5%. The aggregate value of the loan notes will be reduced to the extent that Fidelis does not achieve EBITDA of c. £0.5 million in FY 2021 and will otherwise be repaid on 1 April 2022. The Loan Notes are guaranteed by REACT.
The Consideration Shares will be subject to a lock-in for a period of 24 months following completion of the Acquisition.
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