Coral Products PLC Acquisition of Film & Foil Solutions Limited (2667K)
May 04 2022 - 4:22AM
UK Regulatory
TIDMCRU
RNS Number : 2667K
Coral Products PLC
04 May 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information is now
considered to be in the public domain.
Coral Products plc
(the "Company", the "Group" or "Coral")
Acquisition of Film & Foil Solutions Limited
Issue of Equity
Coral Products plc, a specialist in the design, manufacture and
supply of plastic products based in Wythenshawe, Manchester, is
pleased to announce that it has today acquired the entire issued
share capital of Film & Foil Solutions Limited ("F&F") from
two private individuals (the "Vendors") for a consideration of
GBP3,000,000 (the "Acquisition"), subject to adjustment as set out
below.
The consideration will be applied as follows:
-- GBP1,348,760 in cash on completion, subject to any adjustment
on preparation of completion accounts
-- GBP750,000 to be satisfied through the issue of shares in the
Company at the mid-market price on 29 April 2022 of 15.5p
("Consideration Shares"). Such Consideration Shares will be settled
from the shares held by the Company in treasury, and a further
announcement will be made when that occurs. The Consideration
Shares will also be the subject of a twelve-month lock in period
during which time the shares cannot be sold or transferred;
-- GBP566,240 further cash payment, to be held in escrow against
a contract dispute, and to be released to the Vendors on a pound
for pound basis on settlement; and
-- GBP335,000 further cash payment to be held in escrow against
an insurance claim submitted by F&F which is to be released to
the Vendors on a pound for pound basis provided that a minimum
settlement amount from such claim is achieved.
The cash consideration for the Acquisition is being satisfied
from the Group's existing resources, but as set out above, the cash
consideration may be adjusted (requiring a payback to Coral) under
the sale and purchase agreement following the preparation of
Completion Accounts if the net asset value is lower than an agreed
minimum target. Further announcements will be made if this
occurs.
About Film and Foil Limited
Film & Foil are a leading converter and supplier of flexible
packaging film, print lamination film and speciality plastics,
paper and aluminium foils owned and controlled by Ian Hillman and
Brian Farrell.
The F&F team will remain as employees of the Group; and the
Company may appoint one of the current F&F team to the board in
due course, further updates will be made at that time if that
progresses.
Executive Chairman, Joe Grimmond, said: "This acquisition
reinforces our focus on niche, specialist operators in the plastics
sector. F&F brings to the Group another range of skills and
market opportunities. The Company struggled following a fire in
their manufacturing facility in 2019 but the Directors believe that
with this transaction, the F&F management team can once again
concentrate their efforts in growing the business.
The Board anticipates that the acquisition will be earnings
enhancing in its first year."
As per the unaudited financial statements for the year ended 31
December 2020, F&F reported net assets of GBP3.37m; sales of
GBP10.1million, and profit before tax of GBP61,000. For the full
year ended 31 December 2021, F&F is forecasting a loss before
tax of GBP174k but an underlying profit of GBP541k (after one off
adjustments).
Pursuant to the terms of the share purchase agreement, the
Vendors have also given standard warranties and indemnities in
favour of the Company.
For more information on Coral and Film & Foil, please visit
the following websites:
www.coralproducts.com
www.filmfoil.com
ENQUIRIES :
Coral Products plc
Joe Grimmond, Executive Chairman Tel: 07703 518148
WH Ireland, Nominated Adviser and Broker Tel: 020 7220 1666
Katy Mitchell
Darshan Patel
Megan Liddell
Capital Markets Consultants Limited Tel: 07515 587184
Richard Pearson
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END
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