LONDON (Alliance News) - Branded product developer LiteBulb Group Ltd Thursday announced plans to raise funds to help acquire Concept Merchandise Ltd for up to GBP7.0 million in cash and shares, through the issue of GBP3.5 million in convertible loan notes.
The company said that the new loan notes may be converted into new shares at any time at a price of 1 pence, a premium to its current share price. Litebulb shares are trading at 0.900 pence Thursday morning.
The company will pay the initial consideration for Concept via GBP4.75 million in cash, and GBP250,000 in ordinary shares. A further GBP2.0 million deferred consideration will be payable based on certain performance criteria.
Concept Merchandise posted a pretax profit of GBP1.1 million in 2014, on revenue of GBP7.5 million. LiteBulb said it expects the acquisition to enhance its sales over the next year, and have a positive effect on its earnings.
The acquisition opens up a new product category for LiteBulb, it said, as Concept designs, develops and manufactures stationary and party products.
LiteBulb said it was pleased with its current trading, with sales and committed orders as of end-October now stand at over GBP20 million for the financial year. Its individual group companies are performing well, with Bluw expected to see like-for-like sales growth of over 35% for the the full year.
The acquisition and issue of the loan notes is subject to shareholder approval at an extraordinary general meeting December 10.
"I am delighted to welcome another cash generative, highly complementary business to the group as we continue to deliver on our growth strategy. Concept's expertise in a new sector for us further extends our product offering and we see this as a great opportunity to cross-sell our products across a much wider range of retail relationships," said Chief Executive Simon McGivern in a statement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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