CS Life Sciences Acquisition20 Jan 2025 23:21
This one annoys me a little….
When proposing the CS acquisition ABDX cited CS financial account details to June 23, being the last audited statements. Revenue was £2.716m, EBIT was £390k, and both numbers showed significant improvement to prior year.
The proposal was made on 24 July 24, and so both CS and I’m sure ABDX would have had a good feel for the y/e 30 June 24 numbers at that point - we just weren’t told.
On 26 Sept 24 CS filed a balance sheet as at 30 June 24 with CH. It looked fine to me but it nonetheless stood to reason that if they could file a BS then they must have had P&L numbers as well. So at the 8 October 24 IMC presentation I asked for those details (see Q18). Yates didn’t give any numbers but instead provided a little waffle about account timing differences which didn’t really make any sense (particularly given that CS financial years already matched that of ABDX).
I didn’t bother checking CH again until just now, only to find that an amended set of accounts to 30 June 24 was filed on 21 November, to include a P&L.
That P&L showed that revenue fell marginally but EBIT fell year on year by c45% to £213,772.
That drop in and of itself doesn’t bother me too much. What does bother me is we were sold a proposal ostensibly on higher and rising revenue and EBIT when Yates will very likely have known this was not the case, and when put on the spot about it at the IMC he responded with fluff.
And I say Yates “very likely” knew the true numbers because I’m sure the acquisition would have been valued as a multiple of EBIT, and our upfront consideration (cash and shares) amounted to 2.36m, being almost bang on the nose 10x actual EBT to June 24.
I don’t want (or need) to get too agitated about this particularly given that overall this was still a good deal, but we’ve had a few instances of Yates being a little disingenuous now and trust is easily lost.
Anyway, hopefully the TU will give us all good news, and of course I should remember the >£500k CS contract win announced in Jan!
https://find-and-update.company-information.service.gov.uk/company/SC344423/filing-history
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