Gateley Holdings Regulatory News (GTLY)

6 March 2020

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

GATELEY (HOLDINGS) PLC

("Gateley" or the "Group")

AIM: GTLY

Acquisition of The Vinden Partnership Limited, Issue of Equity and Total Voting Rights

Gateley (Holdings) Plc (AIM:GTLY), the legal and professional services group, is pleased to announce the acquisition of The Vinden Partnership Limited ("Vinden"), a specialist business offering corporate advisory, dispute resolution and consultancy to the built environment in the property and construction markets, for a maximum consideration of £6.75m (the "Acquisition"), equating to a maximum Enterprise Value of £5.15m.

Vinden, which will trade under the name Gateley Vinden Limited following acquisition, strengthens Gateley's construction team, adding weight to its corporate advisory, dispute management and resolution expertise, whilst expanding its growing portfolio of complementary services.

Vinden is a well-established, profitable and cash generative business. In the year ended 31 August 2019, Vinden's revenue was £4.7m, generating profit before tax of £0.8m. Net assets at completion will not be less than £2.1m, including net cash of approximately £1.6m.

The Board expects the Acquisition to be immediately earnings enhancing.

Background to Vinden

Vinden has been operating in the property and construction markets for over 25 years. Its services include dispute management, quantity surveying, project management, bank monitoring, building surveying, sustainability, corporate services and insurance major loss reinstatement. The business has varied and extensive project experience, which covers many sectors including residential, education, affordable housing, industrial, office, retail, health and hotels and leisure.

Vinden operates from five locations, Bolton, Nottingham, Liverpool, Manchester and London. The team is 40-strong and growing, with the majority of staff based in the company's head office in Bolton.

CEO and founder, Peter Vinden, Managing Director, Chris Duffill and Directors, Andrew Crompton and Martin Bennett will remain on the Gateley Vinden management board going forward.

Acquisition rationale

The Acquisition of Vinden adds to and expands the range of dispute management and resolution services offered by the Group's construction team. It also adds real estate and construction funding services which complement the work undertaken by the Group's banking and real estate teams. The Acquisition is consistent with Gateley's growth strategy to acquire legal and professional services businesses which offer complementary specialist services, across Gateley's five business groups.

Terms of the acquisition

Under the terms of the Acquisition, Gateley has acquired the entire issued share capital of Vinden for up to a maximum consideration of £6.75m. The initial payment on completion will be £6.15m, settled 51.2 per cent. in cash and 48.8 per cent. by the issuance of 1,602,564 ordinary shares of 10 pence each in the capital of Gateley ("Ordinary Shares") at a price of £1.872 per Ordinary Share. The initial cash consideration will be funded from Gateley's existing banking facilities.

Deferred consideration of up to £0.6m is payable based on Gateley Vinden's financial performance in the year ending 31 August 2020. Deferred consideration will be settled 50 per cent. in cash and 50 per cent. in Ordinary Shares, valued at the average 10-day closing price of an Ordinary Share on the last practicable date as the deferred consideration falls due.

Issue of new Ordinary Shares

As part of the consideration payable on completion, 1,602,564 Ordinary Shares are to be issued. Application will be made to the London Stock Exchange for the 1,602,564 new Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will take place at 8.00 a.m. on 12 March 2020.

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in issue. Following Admission, Gateley's total issued share capital will comprise 117,609,094 Ordinary Shares. This number may be used by shareholders in Gateley as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of Gateley under the FCA's Disclosure Guidance and Transparency Rules.

Michael Ward, Gateley Chief Executive Officer, said:

"I am pleased to welcome the Vinden team to Gateley. This is a team we know and trust. Their results driven, client centric and inclusive culture is fully aligned with Gateley's and we are confident that the integration process will be smooth and rapid. Bringing Vinden's skills in-house strengthens and expands our corporate advisory, dispute management and resolution expertise.

"This is our ninth acquisition since we joined the AIM market in 2015. We continue to deliver on our strategy, building a strong and diversified group for the benefit of all our stakeholders - our people, our clients and our investors."

Peter Vinden, Chief Executive of The Vinden Partnership, added:

"This is a really positive move for our team and we are delighted to join Gateley. Our two companies have worked together successfully for a number of years and have a shared ethos and approach. By combining our multi-talented teams, we have an enhanced offering for clients which will bring numerous benefits for all."

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