Northern Bear Regulatory News (NTBR)

19 Dec 2006 07:01

Northern Bear Plc19 December 2006 Press Release 19 December 2006 Northern Bear Plc Northern Bear joins AIM Northern Bear PLC ("Northern Bear" or "the Group"), today announces thecommencement of dealings in its Ordinary Shares on the Alternative InvestmentMarket ("AIM") of the London Stock Exchange. Northern Bear was incorporated in 2006 to centralise the strategy and financefunctions of a group of otherwise autonomous building services and materialscompanies, each of which provides products and/or services to the constructionindustry and house builders within the North East of England. The Company's Nominated Adviser is Dawnay, Day Corporate Finance Limited and itsBroker is Dawnay, Day Corporate Broking. Placing and Admission Statistics Issue Price 88pNumber of Placing Shares being issued 2,751,133Proportion of the enlarged issued Share Capital being issued under the Placing 24.36%Number of Ordinary Shares in issue at Admission 11,293,019Gross proceeds of the Placing £2,421,000Market capitalisation of the Ordinary Shares on Admission at the Issue Price £9.94mEstimated net proceeds of the Placing to be received by the Company £1.52m Reasons for Admission, the Placing and use of Funds The Board believe that Admission to AIM will raise the profile of the Group,helping to attract future acquisition targets, as well as providing acquisitioncurrency for future deals and liquidity in the Ordinary Shares. The equityincentives offered under the Share Options Schemes should also help the Groupattract and retain experienced staff. The estimated net proceeds of the Placingafter expenses will be approximately £1.52 million. The Company plans to usethe majority of the funds raised from the Placing and to which it is entitled toprogress its current acquisition policy and the Board also intends to use aproportion of the funds to pay off the deferred consideration from theacquisitions of the Acquired Subsidiaries. It is the intention of the Directors that Northern Bear will continue to makeacquisitions following Admission provided that suitable target businesses can beidentified. Ends For further information: Northern Bear PLCGraham Forrest, Chief Executive Officer Tel: +44 (0)191 371 2934 Dawnay, Day Corporate Finance LimitedAlex Stanbury Tel: +44 (0) 20 750 94570 Sunil Sanikop Tel: +44 (0) 20 750 94570 Alex.stanbury@dawnayday.com www.dawnayday.com Notes to Editors: Background The following companies were acquired, using special purpose vehicles, which nowform part of the Group. Isoler was acquired by Ron Gone from its founder in November 2005. It is aspecialist in passive fire protection which was incorporated in 1992 in order toprovide services to the construction industry. Roof Truss was acquired by Dudley Wilson from its founders in December 2005.Roof Truss, was incorporated in 1991 and is a supplier of roof trusses to housebuilders in the North East of England. In July 2006 Kelmax acquired Springs Roofing. Springs Roofing is an establishedroofing specialist with strong client relationships in both the public andprivate sectors. On 1 August 2006 Maximuse acquired Wensley Roofing. Wensley Roofing is anestablished roofing specialist which commenced trading in 1986. It provides arange of roofing services to customers including major national house buildersoperating in the North East of England. In addition to the above Floor Joist was formed to complement the business ofRoof Truss. Floor Joist, which began trading in October 2006, supplies floorjoists to house builders in the North East of England. Northern Bear was incorporated in April 2006 and, subsequently, on 30 November2006 the Company was re-registered as a PLC. On 6 December 2006 the Companyentered into the Share Exchange Agreements to acquire Isoler, Roof Truss, FloorJoist, Springs Roofing and Wensley Roofing. Group Structure The Group comprises a holding company, Northern Bear, and ten subsidiarycompanies. Five of these companies are non-trading (four were incorporated toact as the holding companies of the four Acquired Subsidiaries) and the fifth isdormant. Of the five trading companies, four were existing companies which havebeen acquired (the Acquired Subsidiaries) and the fifth, Floor Joist, wasincorporated on 9 May 2006. Each Group Company operates with a degree of autonomy, continuing to run its ownadministrative and accounting functions. The Group's head office controlsstrategy, policy, overall financial planning and consolidates the GroupCompanies' accounts. Principal activities of the Group Northern Bear Northern Bear was incorporated to acquire and become the holding company for agroup of building services and materials companies based in the North East ofEngland. Northern Bear is responsible for the Group's strategy, and centralfinance function and for consolidating the Group Companies' results. The location of the Group's premises will allow an Executive Director to visiteach trading subsidiary on a weekly basis. Isoler Isoler is a specialist contractor which provides fire protection and noisereduction services to construction companies for their developments in the NorthEast of England. Specified levels of fire protection and noise control are arequirement for new construction and redevelopment projects under the BuildingRegulations 1991. Isoler carries out three core activities: - Fire Stopping, through the sealing of cables, pipe work and ducting thatpasses through the walls, ceilings and floors of fire compartments within abuilding to prevent the spread of fire from compartment to compartment. - Passive Fire Protection, through the application of specialist fire resistantpaint and the enclosing of steel beams with fire resistant boarding. - Acoustics, through the installation of sound insulation between floors andbetween walls. Roof Truss Roof Truss designs and manufactures roof trusses, supplying its clients in theNorth East of England from a purpose built site. Roof Truss designs its rooftrusses using computer aided design to meet specifications laid down by itsclients and other required standards. It supplies roof trusses to three coregroups of customers, namely national house builders, builders merchants andsmall local builders. Roof Truss has demonstrated organic growth in the pastfour years and has established relationships with a number of key clients. Springs Roofing Springs Roofing is a roofing contractor based in the North East of England,specialising in roof slating, tiling and felt roofing. A large proportion ofits work is carried out for government agencies and councils with particularemphasis on regeneration projects. Springs Roofing has partnership arrangementswith several of its main customers, as well as having preferred contractorstatus with several others. Springs Roofing has been a member of the NationalFederation of Roofing Contractors ("NFRC") for over 20 years. The NFRC is theUK's leading trade association for the roofing industry and is widely known forthe high standards of its member companies (which are achieved in part throughthe operation of a code of practice and a linked complaints procedure). SpringsRoofing is also affiliated with the National Federation of Master Builders. Wensley Roofing Wensley Roofing provides a range of roofing services for construction projectsin the North East of England. Its clients include major national house buildersand local authorities. Wensley Roofing also has a division which handlesspecialist lead work contracts. Like Springs Roofing, Wensley Roofing is amember of the National Federation of Roofing Contractors and the NationalFederation of Master Builders. Wensley Roofing is also a member of the LeadContractors Association ("LCA"), which is responsible for promoting qualitystandards in lead work. The LCA operates a contractor grading system (relatingto standards of workmanship) and has awarded Wensley Roofing with the topgrading of 'excellent'. Wensley Roofing has been awarded Investors in People status and has won severalawards including NHBC awards and the Gold Standard in the Construction SkillsCertification Scheme. Floor Joist Floor Joist designs and manufactures timber engineered floor joists, providingdomestic flooring solutions to house builders in the North East of England andwas founded in order to complement the other businesses within the Group and inparticular that of Roof Truss. Potential Group Synergies The Directors believe that each of the businesses within the Group shouldcontinue to operate autonomously. Where any synergies exist, these will beexplored with caution, having regard for the advantages of keeping each businessindependent. Due to the fact that the Group is newly formed, the Directors haveyet to explore or evaluate any economies of scale relating to greater purchasingpower. Corporate Strategy The Directors' objective is to continue to apply the strategy developed by theFounders. This is to acquire mature, owner-managed businesses, in the buildingservices and materials sector, which demonstrate consistent profitability andpositive operating cash flow. Preferably, each business will also have a highnet profit margin which, the Directors believe, reduces the risks associatedwith an acquisition. Target businesses will also need to be managed byexperienced management who are prepared to make a long term commitment to thebusiness. With any proposed acquisition it is the intention that some or all of theexisting management team will be retained to operate the business and keypersonnel will be incentivised with a performance related remuneration packageand/or share incentives. Vendors who do not remain involved in an acquiredbusiness in an executive capacity will, ordinarily, be encouraged to stay withthe business on a consultancy basis as the Directors often consider theirexpertise to be of great assistance. Northern Bear aims to satisfy the consideration for future acquisitions using acombination of cash and the issue of Ordinary Shares. The Directors believethat this consideration structure should ensure that the vendors have asignificant financial interest in the continued progress of the business theyhave sold and the Group as a whole. The Directors believe that a growth opportunity for the Group is the need offounders and operators of small, self-contained, profitable businesses torealise all or part of their equity. They also believe that a factor for ownersof possible target businesses in deciding whether to accept an offer to disposeof their business is the future of the management team who have, in some cases,been with the company for many years. The Directors believe the Group is well placed to be able to make furtheracquisitions of similar businesses to those of the Acquired Subsidiaries bytaking advantage of the Directors' industry and professional contacts in theNorth East of England. In this regard, the Company has secured an option toacquire MGM, a business based in the North East of England which provides avariety of specialist services relating to the refurbishment of commercial andresidential property and listed buildings. The MGM Option is exercisable solelyat the discretion of Northern Bear. The Board believe that Admission to AIM will raise the profile of the Group,helping to attract future acquisition targets, as well as providing acquisitioncurrency and liquidity in the Ordinary Shares. The equity incentives offered under the Share Options Schemes should also helpthe Group attract and retain experienced staff. The Company plans to use themajority of the funds raised from the Placing to progress its currentacquisition policy and the Board also intends to use a proportion of the fundsto pay off the deferred consideration from the acquisitions of the AcquiredSubsidiaries. Board of Directors Jon Pither, Executive Chairman Mr Pither has experience as a director of both quoted and non-quoted companies.In 1969 Mr Pither joined Amari plc, an engineering and building productscompany, manufacturing a wide range of building products, and for 19 years, asmanaging director he helped grow the business until it was acquired by GlynwedInternational plc in 1988. Subsequently Mr Pither has developed a range ofcorporate interests, including the chairmanship of Active Capital Trust plc, thedeputy chairmanship of Alumasc Group plc and Jourdan plc (both of which operatein the building services and materials sector) as well as holding directorshipsof a number of other public and private companies. Graham Forrest, Chief Executive Officer Mr Forrest graduated from Durham University in 1983 and qualified as a CharteredAccountant in 1986. During his business career, he has served on the boards offour separate public companies in roles including chief executive and financedirector. He was involved in three of these companies at the IPO stage. MrForrest has responsibility for monitoring the Group's businesses and isinstrumental in delivering the Group's growth strategy. Steve Roberts, Interim Finance Director Mr Roberts qualified as a Chartered Accountant with KPMG in 1991. He has workedin corporate finance since 1992. Mr Roberts joined McInnes Corporate FinanceLimited as a partner in 1996 and has acted as lead advisor on many small captransactions. As Interim Finance Director he will have overall responsibilityfor financial planning and control within the Group. Roy Stanley, Non-executive Director Mr Stanley holds an MBA from Newcastle University. He was a director of the SEVGroup Limited, from 1995 to 1996. He then spent three years as director ofExpress Engineering Group, a post he held until 1999. In 1999 he foundedTanfield Group PLC. From 2000 to 2003, Mr Stanley was Chief Executive ofComeleon plc, a digital imaging company, which was taken from start-up to alisting on AIM. Comeleon was subsequently acquired by Tanfield Group PLC in2003 by way of a reverse takeover. Marcus Yeoman, Non-executive Director, aged 43 Mr Yeoman has 20 years experience as a director of small companies. He iscurrently a non-executive director of Enterprise North PLC and Bright FuturesPlc as well as holding directorships of a number of private companies who haveengaged him principally to assist them with their growth strategies. - Ends - "The contents of this announcement, which has been prepared and issued by and isthe sole responsibility of Northern Bear, have been approved solely for thepurposes of section 21 of the Financial Services and Markets Act 2000 by Dawnay,Day Corporate Finance Limited. Dawnay, Day Corporate Finance Limited and Dawnay, Day Brokers Limited, each ofwhich is regulated in the United Kingdom by the Financial Services Authority,are acting for Northern Bear and for no-one else in connection with the mattersdescribed in this announcement and will not be responsible to anyone other thanNorthern Bear for providing the protections afforded to customers of Dawnay, DayCorporate Finance Limited and/or Dawnay, Day Corporate Broking, a division ofDawnay Day Brokers Limited or for advising them on the contents of thisannouncement or any matter referred to herein. This announcement is not for release, distribution or publication, in whole orpart, into the United States, Canada, Australia, South Africa or Japan. This announcement does not, and no part of it shall, constitute or form part ofany offer for sale or subscription of securities, or any solicitation of anysuch offer, nor shall it, or any part of it, form the basis of or be relied uponin connection with any contract or commitment whatsoever." This information is provided by RNS The company news service from the London Stock Exchange