Latest News
9 December 2005
Proposed acquisition of Macdonald & Company Group Limited
Approval of waiver of the obligation to make a mandatory offer under Rule 9 of the City Code on
Takeovers and Mergers
Admission of the Enlarged Share Capital to trading on AIM
1 for 10 Share Capital Consolidation
Notice of Extraordinary General Meeting
Prime People plc (“the Company”), today announces that it has conditionally agreed to acquire the entire issued share capital of Macdonald & Company Group Limited (“Macdonald”), an independent professional recruitment consultancy focused on the commercial property industry
Key points:
- The maximum aggregate consideration for the acquisition is £10.52 million. This will comprise an initial consideration of £9.52 million to be satisfied by the issue of 7,155,593 New Ordinary Shares at a price of 84.13 pence per share and £3.5 million in cash together with up to a further £1 million by way of deferred consideration of up to 1,188,637 New Ordinary Shares at a price of 84.13 pence per share;
- The market capitalisation of the Enlarged Group on Admission (based on the issue price of the New Ordinary Shares of 84.13p) will be approximately £9.12 million. Following completion of the Proposals, other than the issue of the Deferred Consideration Shares, the Vendors will hold approximately 66 per cent. of the Enlarged Share Capital of the Company;
- Macdonald is the only recruitment consultancy to be approved by the Royal Institution of Chartered Surveyors (“RICS”), the principal professional body representing property professionals worldwide;
- Macdonald has an experienced management team with a strong record of delivering growth;
- For the year ended 31 March 2005, Macdonald reported a 40 per cent. increase in turnover at £11.7 million (2004: £8.4 million) and profit before tax up 44 per cent. at £1.16 million (2004: £0.80 million);
- For the six months ended 30 September 2005, Macdonald reported turnover of £7.4 million and profit before tax of £0.78 million. In the seven months ended 31 October 2005, turnover was 34 per cent above the comparable period in 2004;
- The deferred consideration will be payable in full if the operating profit of Macdonald for the year ending 31 March 2006 is not less than £1.95 million;
- The existing Macdonald Directors, Robert Macdonald, Executive Chairman; Peter Moore, Managing Director; and John Lewis, non-executive Director, will join the Board of Prime People in the same roles.
- Christopher Heayberd, the current Finance Director of Prime People, will continue in his present role and Simon Murphy, currently Chief Executive of Prime People, will become a non-executive Director. Peter Hearn, currently Chairman of Prime People and David Coubrough, currently a non-executive of Prime People will resign from the Board;
- Irrevocable undertakings to vote in favour of the Resolutions have been obtained from shareholders, including Prime People directors, in respect of 18,752,833 Ordinary Shares in aggregate (representing 50.89 per cent. of the Existing Ordinary Shares);
- The acquisition of Macdonald is classified as a reverse takeover under the AIM Rules by virtue of its size and is conditional, inter alia, on the approval of Prime People shareholders which is being sought at an Extraordinary General Meeting at 11.00 a.m. on the 3 January 2006;
- The Company is seeking Shareholder approval at the Extraordinary General Meeting for a waiver of the obligation under Rule 9 of the City Code which would otherwise require the members of the concert party (comprising the Vendors) to offer to acquire those New Ordinary Shares that they do not own;
- Proposed consolidation of every 10 existing issued Ordinary Shares into one New Ordinary Share;
- It is expected that Admission of the New Ordinary Shares will become effective and that dealings in the Enlarged Share Capital will commence on AIM on 4 January 2006;
Commenting on the acquisition, Peter Moore, Managing Director of Macdonald and proposed Managing Director of the Enlarged Group said:
“This transaction marks an exciting next step in the Macdonald story. Macdonald has a great growth record and is undoubtedly a leader in the property recruitment sector. However, I believe we are a long way from fulfilling our full potential as a business. Admision to AIM will significantly increase the profile of the business and will open up a range of new options to help us maintain the growth of the business.”Simon Murphy, Chief Executive of Prime People said:
“I am delighted that we have been able to deliver on our stated acquisition strategy so quickly. Macdonald meets the criteria we set out in our strategy - a high quality service business with a strong management team, a good record of profits and earnings growth and the potential for further organic and acquisitive growth. I look forward to working with the new team in delivering long term enhanced shareholder value.”
This summary should be read in conjunction with the full text of the announcement.
-Ends-
For further information:
Prime People
Simon Murphy / Chris Heayberd 0207 831 5297
Macdonald
Robert Macdonald 0207 318 5874
Peter Moore 0207 318 5873
WH Ireland
David Youngman / Robin Gwyn 0161 832 6644
Hogarth Partnership
James Longfield / Georgina Briscoe 0207 357 9477
For the full version of this announcement please click below