15 Nov 2013 07:00
15 November 2013
NORTHBRIDGE INDUSTRIAL SERVICES PLC
("Northbridge" or the "Group")
Acquisition of the assets of Oilfield Material Management Limited ("OMM BVI")
Northbridge, the industrial services and rental company, is pleased to announce that it has today completed the acquisition of the trade and assets of OMM BVI based in Abu Dhabi for an initial consideration of US$3.0 million (£1.9 million) (the "Initial Consideration"), made up of US$2.5 million (£1.6 million) in cash and US$0.5 million (£0.3 million) in 66,829 Northbridge ordinary shares ("Ordinary Shares") in addition to a deferred payment element of a maximum of US$4.75 million (£3.0 million) (the "Deferred Consideration"). The new Ordinary Shares are subject to a 38 month lock-in and orderly market agreement.
OMM BVI was founded in 1989 and is a rental provider of drilling tools for the oil and gas industry to customers in the Middle East, North Africa and the C.I.S.
The assets have been acquired by Northbridge (Middle East) FZE, a wholly owned subsidiary of Northbridge, and will trade utilising the Group's existing oil tools identity as "Tasman OMM Ltd".
In addition to the Initial Consideration, Northbridge expects to pay a Deferred Consideration in March 2017. This will comprise a minimum payment of US$2.5 million (£1.6 million) plus an additional maximum payment of US$2.25 million (£1.4 million), which will be subject to the performance of the business during the 12 months ending 31 December 2016. The maximum Deferred Consideration will become payable if net profit before taxation from Tasman OMM Ltd equals or exceeds US$3.4 million (£2.1 million) during that year.
Proforma unaudited accounts for the eight month period to 31 August 2013 indicate net assets of US$6.6 million (£4.1 million), with annualised hire related revenue of US$4.6 million (£2.9 million). The business is cash generative at both operating and PBT levels.
The acquisition marks the first utilisation of new debt facilities agreed with KBC Bank NV which are available for use by Northbridge on a global basis. Lloyds remain Northbridge's main banking group and are fully supportive of the KBC facilities.
Commenting on the acquisition, Eric Hook, Chief Executive of Northbridge, said:
"We are delighted to be announcing the acquisition of this business which is an excellent strategic fit for the Group. It complements Tasman Oil Tools Pty Limited, our strongly performing business in Australia, and expands its presence into the Middle Eastern market. It also adds to our already established successful business in the region where it will share our existing location and resources.
This acquisition follows rapidly on from the acquisition of Crestchic (Asia-Pacific) which we announced on 13 September 2013 and continues our acquisition strategy of buying niche rental businesses which are cash generative and have the potential for further organic growth."
Total voting rights
Application has been made for admission to trading on AIM ("Admission") in respect of the 66,829 new Ordinary Shares being issued as part of the initial consideration and it is expected that Admission will occur on 20 November 2013. Following Admission, the Company's issued share capital will comprise 17,424,332 Ordinary Shares, including 152,150 Ordinary Shares held in treasury.
Therefore the figure of 17,272,182 ordinary shares should be used by shareholders in the Company 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 the Company under the FCA's Disclosure and Transparency Rules.
For further information:
Northbridge Industrial Services plc Eric Hook, Chief Executive Officer Craig Robinson, Finance Director
| 01283 531645 |
Westhouse Securities Limited (Nominated Adviser and Broker) Robert Finlay / Antonio Bossi / Paul Gillam / Henry Willcocks
| 020 7601 6100 |
Buchanan Charles Ryland / Clare Akhurst
| 020 7466 5000 |
About Northbridge:
Northbridge Industrial Services plc hires and sells specialist industrial equipment to a non-cyclical customer base. With offices or agents in the UK, US, Dubai, Belgium, Germany, France, Australia, Singapore, India, Brazil, Korea and Azerbaijan, Northbridge has a global customer base. This includes utility companies, the oil and gas sector, shipping, construction and the public sector. The product range includes loadbanks, transformers, generators, compressors and oil tools. Northbridge was admitted to AIM in 2006 since when it has recorded increased earnings and dividends based on providing a high level of service, responsiveness and flexibility to customers. It has grown by acquisition of companies in the UK, Dubai, Azerbaijan, Australia and Belgium and through investing further in those acquired companies to make them more successful. Northbridge continues to seek suitable businesses for acquisition across the world.