Begbies Regulatory News (BEG)

6 March 2018

Begbies Traynor Group plc

Acquisition of Springboard Corporate Finance Limited

Begbies Traynor Group plc (the "Group") today announces the acquisition of the entire issued share capital of Springboard Corporate Finance Limited.

Springboard are a highly regarded, mid-market corporate finance practice, operating from offices in Birmingham, London and Nottingham. The practice has strong relationships with owner-managers, management teams and private equity firms, acting across a broad range of buy and sell side private company transactions. The business has delivered excellent growth in recent years and in 2017 completed 17 transactions with a total value in excess of £225 million.

The existing team of thirteen employees and management will join the Group on acquisition. The management team, who have all committed to remain with the business, will be responsible for the ongoing management and development of the Group's corporate finance services.

This acquisition is in line with the Group's strategy to develop its advisory services and provides an excellent platform for organic and acquisitive growth when combined with the Group's existing advisory teams in London and Manchester.

In its financial year ended 30 June 2017, Springboard posted annual revenue of £2.3 million and pre-tax profits of £0.75 million when reported on the same basis as the Group. It had gross assets of £1.1 million as at 30 June 2017.

Principal terms of the acquisition

The acquisition is for an initial net consideration of £2.75 million (on a cash free, debt free basis), to be satisfied by £1.375 million in cash from the Group's existing resources and through the issue of 1,884,568 new ordinary shares of 5 pence each in the Group ("Ordinary Shares"). 

Under the terms of the acquisition, additional contingent consideration of up to £0.5 million will become payable subject to the achievement of financial targets in the five-year period directly following completion. The contingent consideration is calculated according to an agreed formula and is payable in cash.

Gross potential consideration of £4.5 million comprises the £2.75 million initial net consideration, £0.5 million contingent consideration and a further £1.25 million cash payment at acquisition in relation to Springboard's cash at completion, subject to completion account adjustments.

The acquisition is expected to be earnings enhancing, and underpins our growth expectations for the financial year commencing 1 May 2018. 

Admission of new ordinary shares to trading on AIM

An application has been made for 1,884,568 Ordinary Shares to be admitted to trading on AIM ("Admission") in part satisfaction of the initial consideration. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in the Group and it is expected that dealings in these new Ordinary Shares will commence on 9 March 2018.

Following Admission, the Group will have 109,647,677 Ordinary Shares in issue. The Group does not hold any shares in treasury and, therefore, this figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the Group.

Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:

"I am delighted to welcome the Springboard team to the Group; they are a highly-regarded, mid-market corporate finance practice which is complementary to our existing advisory services. We look forward to supporting their expansion plans and their contribution to further growing the Group's revenue and profits."

Enquiries please contact:

Begbies Traynor Group plc 0161 837 1700

Ric Traynor - Executive Chairman

Nick Taylor - Group Finance Director

Canaccord Genuity Limited 020 7523 4588

(Nominated Adviser and Joint Broker)

Sunil Duggal / Andrew Buchanan / Margarita Mitropoulou

Shore Capital 020 7408 4090

(Joint Broker)

Mark Percy / Anita Ghanekar

MHP Communications 020 3128 8100

Reg Hoare / Katie Hunt

Information on Begbies Traynor Group can be accessed via the Group's website atwww.begbies-traynorgroup.com