- CEPS has acquired 55% of RAM (1003) Limited, a newly incorporated company, for GBP670,000, which was formed to acquire Hickton Consultants Limited. The acquisition of which was completed on 29 January.

The vendors of Hickton are chairman Tony Hickton and members of his family and a number of former employees. Tony Hickton has not undertaken an executive role in the running the business for a number of years.

Hickton is a leading provider of clerks of works services to the construction industry, providing a quality assurance resource on larger value projects across the UK, with customers ranging from end-user clients, architects, project management firms and contractors. The business was established in 1991, and is based in Elsecar, South Yorkshire.

CEPS says Hickton is profitable, cash generative and has enjoyed significant growth in sales and EBITDA over the last three years. In the year ended 28 February 2015, Hickton's sales were GBP2.69 million and EBITDA was GBP0.42 million. At 28 February 2015 net assets were GBP469,000, including a cash balance of GBP361,000. Trading performance and net assets of Hickton in 2015/6 are in line with management's expectations for the year to date. Hickton has been acquired by RAM for a total consideration of GBP2.00 million, comprising initial consideration of GBP1.35 million and deferred consideration of GBP0.65 million payable over four years from completion in quarterly instalments.

CEPS will subscribe GBP670,000 into RAM for 54,973 ordinary shares for GBP54,973, and GBP615,027 shareholder loan notes, with an 8% interest rate.

Tony Mobbs, who has been managing director of Hickton since 2012, will continue as MD of Hickton and will be a director of RAM. Mobbs was not a shareholder in Hickton prior to the acquisition by CEPS, but has invested as part of the transaction, and will receive 20,000 ordinary shares, being 20% of the issued share capital of RAM.

CEPS says the acquisition of Hickton fits with the company's strategy of acquiring established, profitable, high margin, niche businesses and utilises a funding structure aimed at returning acquisition funds to CEPS as rapidly as possible, thereby maximising the return on equity employed.

In order to finance the CEPS acquisition, the company has received a loan from a third party for GBP690,000. The loan carries interest at an annual rate of 10% accruing daily and payable in arrears on 30 April 2016, 31 July 2016, 30 October 2016 and 31 January 2017. The loan is repayable on or before the 31 January 2017 and may be repaid in one or more instalments after 30 October 2016.

The loan is secured against assets held (directly or indirectly) by David Horner, a director of the company.

At 9:14am: [LON:CEPS] CEPS PLC share price was 0p at 55p

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