ROL.L Regulatory News (ROL)

RNS

25 August 2017

Rotala Plc

("Rotala" or the "Company" or the "Group")

Further re. Fund Raise and Acquisitions

Further to its announcement on 28 July 2017 regarding a Placing and Subscription to raise £3.5 million (before expenses) to fund acquisitions, Rotala announces that it has now entered into a conditional agreement in respect of the Proposed Acquisition, being the acquisition by the Company of certain assets from Go Goodwins (Coaches) Limited (the "Goodwins Acquisition").

Pursuant to the terms of a business purchase agreement ("BPA") Rotala has agreed to acquire a bus and minibus services business which comprises 18 buses and a freehold property in the Manchester area, together with goodwill and the benefit of TfGM bus service contracts, for a cash consideration of £692,500 payable in full on completion of the BPA. The total expected cost of the Goodwins Acquisition is approximately £1 million, including the necessary working capital and capital expenditure associated with the acquisition, which will be satisfied from the net proceeds of the Subscription.

The Directors believe that the Goodwins Acquisition will enable Rotala to significantly grow its operations in the Manchester area and potentially double its bus capacity. No additional overheads are expected to be required as a result of the acquisition and the Directors believe that the Company will benefit from additional sales, gross profit and EBITDA contributions of approximately £2.0 million, £0.4 million and £0.2 million respectively under Rotala's ownership, in the first full year following completion of the Proposed Acquisition.

Completion of the BPA is expected to occur on 31 August 2017, following compliance by the target company with its obligations under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

Unless otherwise defined, capitalised terms in this announcement shall have the same meaning as those within the 'Definitions' section of the Company's RNS released on 28 July 2017.