Last checked at 12 Oct 2022 07:00
12 October 2022
Coral Products plc
(the "Company", the "Group" or "Coral")
Acquisition of Ecodeck Grids Limited
An Eco Friendly Business Using 100% Recycled Plastic - Will Strengthen the Group's E-Commerce Capabilities and be Earnings Enhancing in Year 1
Coral Products plc, a specialist in the design, manufacture and supply of plastic products based in Wythenshawe, Manchester, is pleased to announce that it has acquired the entire issued share capital of Ecodeck Grids Limited ("Ecodeck") for a consideration of up to £5,600,000 (the "Acquisition") to be satisfied by the initial payment of £3,350,000 in cash, the issue of 6,250,000 ordinary shares in the Company at a price of 16p per ordinary share (for a total value of £1,000,000), (the "Consideration Shares"), which are subject to a twelve month lock in arrangement and an earn out as described below of up to £1,250,000.
The earn out comprises three components, being:
· A first earn out consideration is payable for the year ended 31 January 2023 of an additional £3 for every £1 of profit before tax that exceeds £1,000,000. Under no circumstances shall the first earn-out consideration exceed £1,150,000;
· A second earn out consideration will be payable in the form of a profit share of 10% of the profit before tax for the 3-month period from 1 February 2023 to 30 April 2023 if the profit before tax exceeds £1,500,000 for the year to 30 April 2023; and
· A third earn out consideration will be payable in the form of a profit share of 10% of the profit before tax in excess of £1,500,000 for the year to 30 April 2024
The maximum amount of the second and third earn out considerations shall not exceed £100,000.
The cash consideration for the Acquisition is being satisfied from the Group's existing resources and the Consideration Shares will be settled from the 1,914,945 ordinary shares held by the Company in treasury (the "Treasury Shares") and the issue of 4,335,055 new shares (the "New Shares"). A further announcement will be made when this occurs.
About Ecodeck
Ecodeck supply a range of building and landscape products from driveway grids, gravel pathway grids to plastic shed bases and grass grid reinforcement. The range of products are all environmentally and eco-friendly being made from 100% recycled plastic.
It is currently owned by Matthew and Kelly Staples. Ecodeck, which is based in Sutton-in-Ashfield, Nottinghamshire will continue to operate from its existing premises.
As per the unaudited financial statements for the year ended 30 January 2022, Ecodeck's sales were £6.8 million, profit after tax was £0.9 million and net asset value was £1.9 million.
Pursuant to the terms of the share purchase agreement, the Vendors have given warranties and indemnities in favour of the Company.
Executive Chairman, Joe Grimmond, said: "This acquisition further reinforces our focus on niche, specialist operators in the plastics sector. We have an opportunity to leverage Ecodeck's on-line platform for other Group eco-friendly products. We see significant scope to add value as we integrate the business into the Group - the acquisition continues to broaden our Group's product offering and greatly enhances our available market opportunities. We expect this acquisition will be earnings enhancing in its first year."
For more information on Coral and Ecodeck, please visit the following websites:
www.coralproducts.com
www.ecodeck.biz
Admission and Total Voting Rights
Application will be made to the London Stock Exchange to admit the Treasury Shares and the New Shares to trading on AIM. Admission of the Consideration Shares is expected to occur on or around 19 October 2022 ("Admission"). The new ordinary shares will rank pari passu with the existing ordinary shares.
In conformity with DTR 5.6.1, the Company notifies that, as at the date of this announcement, it has a single class of shares in issue being Ordinary Shares and Company has 85,942,534 Ordinary Shares in issue of which holds 1,914,945 Ordinary Shares are held in treasury. Therefore, the total number of voting rights in the Company is 84,027,589 Ordinary Shares.
Each Ordinary Share entitles the holder to a single vote at general meetings of the Company. Following Admission, the enlarged issued share capital of the Company will comprise 90,277,589 ordinary shares of 1 pence each. There will be no Ordinary Shares held in treasury following this admission.
Further enquiries:
Coral Products plc | Tel: 07703 518148 |
Joe Grimmond, Executive Chairman |
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Cenkos LLP (Nominated Advisor & Broker) | Tel: 020 7397 1966 |
Stephen Keys Charlie Combe | |
Novella Communications (Financial Public Relations) | Tel: 020 3151 7008 |
Tim Robertson Claire de Groot Safia Colebrook coral@novella-comms.com
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This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.