Coral Products acquires Film & Foil Solutions for £3.0 million
MANCHESTER, UK: Coral Products plc has acquired the entire issued share capital of Film & Foil Solutions Limited (F&F) from two private individuals for a consideration of £3.0 million.
Coral Products plc is a specialist in the design, manufacture and supply of plastic products based in Wythenshawe, Manchester.
Film & Foil Solutions are a leading converter and supplier of flexible packaging film, print lamination film and speciality plastics, paper and aluminium foils owned and controlled by Ian Hillman and Brian Farrell.
The F&F team will remain as employees of the Group; and the Company may appoint one of the current F&F team to the board in due course, further updates will be made at that time if that progresses.
Executive Chairman, Joe Grimmond, said: “This acquisition reinforces our focus on niche, specialist operators in the plastics sector. F&F brings to the Group another range of skills and market opportunities. The Company struggled following a fire in their manufacturing facility in 2019 but the Directors believe that with this transaction, the F&F management team can once again concentrate their efforts in growing the business.
The Board anticipates that the acquisition will be earnings enhancing in its first year.”
As per the unaudited financial statements for the year ended 31 December 2020, F&F reported net assets of £3.37m; sales of £10.1million, and profit before tax of £61,000. For the full year ended 31 December 2021, F&F is forecasting a loss before tax of £174k but an underlying profit of £541k (after one off adjustments).
The consideration will be applied as follows:
· £1,348,760 in cash on completion, subject to any adjustment on preparation of completion accounts
· £750,000 to be satisfied through the issue of shares in the Company at the mid-market price on 29 April 2022 of 15.5p (“Consideration Shares”). Such Consideration Shares will be settled from the shares held by the Company in treasury, and a further announcement will be made when that occurs. The Consideration Shares will also be the subject of a twelve-month lock in period during which time the shares cannot be sold or transferred;
· £566,240 further cash payment, to be held in escrow against a contract dispute, and to be released to the Vendors on a pound for pound basis on settlement; and
· £335,000 further cash payment to be held in escrow against an insurance claim submitted by F&F which is to be released to the Vendors on a pound for pound basis provided that a minimum settlement amount from such claim is achieved.
About The Author
