Acquisition

28 Nov 2007 07:00

Cavanagh Group PLC28 November 2007 Cavanagh Group plc 28 November 2007 Acquisition Purchase of JRG Financial Consultancy Cavanagh Group plc ("Cavanagh"), one of the leading Independent FinancialAdvisers today announces the acquisition of JRG Financial Consultancy ("JRG", "Company") for a consideration comprising cash of up to £4.25 million and652,105 new ordinary shares of 1p each in Cavanagh (the "Consideration Shares"),giving a total consideration of up to £5.3 million based on the share pricebeing £1.60 per share as at the close of business on 27th November 2007. The initial consideration for the acquisition comprises the Consideration Sharesand £3.5 million in cash, funded by way of additional bank borrowing. Furtherconsideration of up to a maximum of £750,000 in cash will become payable afterone year subject to certain profit targets being achieved. The vendors haveagreed not to dispose of the Consideration Shares for a period of three years,other than with the consent of the Company. Application will be made to the London Stock Exchange for the considerationshares to be admitted to AIM as soon as practicable. Based in Edinburgh, JRG was formed in1986 and now employs 36 people working fromoffices in Edinburgh, Jedburgh and Reigate. Mr Gordon Sutherland has led theCompany since 1988 and following the acquisition will be appointed a Director ofCavanagh Financial Management Limited. The senior JRG management are allcontinuing with the business. For the twelve months ended 31 December 2006, JRG achieved revenues of £4.3million and profit before tax of £275,000 after directors bonuses, and atcompletion, the Company had cash balances of £900,000 as at 31st October 2007.Cavanagh expects the acquisition to be earnings enhancing in the first fullyear.* Commenting on the acquisition, Andrew Fay, Chief Executive of Cavanagh said "Ourcorporate proposition has been developing and contributing well to the growth ofthe Group and the acquisition of a quality corporate IFA such as JRGsignificantly enhances our proposition and positions us as one of the leadingfinancial advisers in the corporate market. We welcome the JRG team to Cavanaghand look forward to them playing a key and exciting role in our future growth" \* This statement does not constitute a profit forecast nor should it beinterpreted to mean that future earnings per share of Cavanagh following theacquisition will necessarily match or exceed historical earnings per share ofCavanagh. Enquiries: Cavanagh Group plc 01444 475400Andrew Fay, Chief Executive Brewin Dolphin Limited 0845 270 8610Andrew Emmott ENDS This information is provided by RNS The company news service from the London Stock Exchange