Ceps Regulatory News (CEPS)

28 March 2019

CEPS PLC

 ("CEPS" or the "Company")

Acquisition by CemTeal Limited of Travelfast Limited, trading as Sampling International

CEPS announces that its subsidiary company, CemTeal Limited ("CemTeal"), has entered into a contract to acquire 100 per cent of the issued share capital of Travelfast Limited ("TFT"), trading as Sampling International, for a maximum aggregate consideration of £1,200,009, payable in cash over three years based on performance. The transaction was completed on 27 March 2019.

The vendors of TFT are founding member and major shareholder, Stephen Hubbard, and other shareholders. Stephen Hubbard will be Managing Director of CEM Press Limited, the trading company of CemTeal Limited, and Travelfast Limited ("the Group") and Richard Briggs of CEM Press Limited will be Finance Director of the Group. Stephen is contracted to remain with the Group for a minimum of three years from completion to support the integration of both companies and to assist in the development of a succession plan to support the long-term financial viability of the Group. The payment of the maximum aggregate consideration of £1,200,009 in cash is conditional, inter alia, upon Stephen Hubbard's continued employment by the Group during the three-year period (subject to customary earn-out protections).

TFT was established in 2009 and is based in Batley, Yorkshire. TFT is one of the leading providers in designing and manufacturing sample books, shade cards and other display solutions.

In the year ended 31 December 2017, TFT's sales were £5,303,464, EBITDA was £102,496 and loss before taxation was £32,540. At 31 December 2017, net assets were £231,277. Trading performance and net assets of TFT in 2018 were behind those of 2017, but in line with management's expectations for the period.

The acquisition of TFT will make the newly formed Group one of the largest individual pattern book and shade card makers in the UK, with two production facilities.

The acquisition of TFT fits with CemTeal's strategy of broadening its services and working with management teams who are committed to developing their businesses further. It is expected that there will be significant synergies arising from the combination of these two complementary businesses. The Directors of CEPS believe that the acquisition of TFT by CemTeal will be a valuable addition to CEPS.

The consideration for the acquisition will be funded from the cash flow of the Group. In March 2019 David Horner, Chairman of CEPS, lent £100,000 to TFT. David Horner's loan is unsecured and bears interest at 10% per annum. This loan was made to allow TFT to meet certain liabilities. In addition to the consideration for the acquisition, on completion CemTeal injected £500,000 into TFT in part to be used for working capital purposes and in part to repay the loan to David Horner.

The announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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