Prime Highlights-
- CEPS subsidiary Aford Awards Group Holdings acquires education resources supplier Primary Teaching Services in a deal worth up to £4.6m.
- Bolt-on acquisition fits CEPS value creation strategy for shareholders, with £3,016,000 of cash payable on completion funded from existing resources.
Key Facts-
- Primary Teaching Services posts £4.4m unaudited revenue and £594,200 unaudited profit before tax for its latest year.
- AAGHL will hold 90 percent of NewCo, while the management team holds the remaining 10 percent.
Background-
Industrial holding business CEPS has expanded into school supplies after its 75 percent owned subsidiary, Aford Awards Group Holdings (AAGHL), bought Primary Teaching Services (PTS) for up to £4.6m.
AAGHL closed the purchase through a newly formed company, NewCo. CEPS described it as a bolt-on deal that fits its plan to create value for shareholders.
PTS, based in East Yorkshire, has traded for more than three decades and sells motivational products and classroom resources. It focuses on reward items that boost pupil engagement and encourage good behavior, such as customized stickers, stampers, badges, certificates, merit charts and learning aids.
The company earned unaudited revenue of £4.4m and unaudited pre-tax profit of £594,200 in its latest financial year, and it holds unaudited net assets of £1,460,897.
The maximum price is £4,590,000. The package covers £3,016,000 in cash at completion, £846,000 in vendor loan notes, £120,000 in shareholder loan notes and £8,000 of equity rolled into NewCo. Up to £600,000 more depends on PTS meeting performance targets over the coming financial year.
AAGHL is subscribing for £2m of acquisition loan notes and a further £1,350,000 of shareholder loan notes. CEPS funded the price from its existing cash by making an unsecured loan to AAGHL.
After completion, AAGHL will own 90 percent of NewCo, and the management team will own the remaining 10 percent. The split gives management a direct stake in the business as PTS joins the CEPS group.
