1 December 2022

Facilities by ADF plc

("Facilities by ADF", "ADF", the "Company" or the "Group")

Acquisition of Location One Limited

Complementary services create an expanded Group offering as investment in the UK Film and TV industry continues to accelerate

Facilities by ADF, the leading provider of premium serviced production facilities to the UK film and high-end television industry ("HETV"), today announces the acquisition of Location One Limited ("Location One") ("the Acquisition"), the UK's largest integrated TV and film location service and equipment hire company. The Facilities by ADF and Location One businesses are well known to each other, with a successful history of working together on a wide variety of productions since Location One's conception.

Highlights

·    Acquisition of integrated equipment hire company providing complementary services to that of ADF, having worked together since 2008.

·      Location One customer base includes Amazon Studios, Netflix, Warner Brothers and the BBC.

·      Moves ADF towards becoming a one-stop-shop to the UK TV and HETV industry.

·    Initial consideration of £4.43 million paid in cash alongside issue of 3,407,419 new ADF              ordinary shares, subject to lock-in agreements.

·     Additional contingent earn out consideration of up to £2.66 million, payable in cash instalments subject to business performance thresholds over a 36-month period.

·      Acquisition to be immediately earnings accretive.

Location One

Location One is an integrated TV and film location service and equipment hire company supporting location and production companies across the UK with its high-quality equipment and customer service levels. Location One's offering includes generators, water bowsers, lighting equipment, environmentally friendly battery-stores/other renewable solutions and other capital light consumables, all highly complementary additional products to the Group's existing premium serviced production facility offering.  

Having embarked on a journey to net-zero (currently carbon-neutral), Location One leads its market with the ECOPOD recycling solution, waste-water treatment, battery & hybrid tower- lights and battery-store technology. Like Facilities by ADF, Location One is an approved albert supplier (as well as being an Event Partner).

Founded in 2008, headquartered in Barking and with locations in London, Surrey, Bristol, Newport, Manchester and Newcastle, Location One and its team of 80 employees service a customer base that includes organisations such as Amazon Studios, Netflix, Warner Brothers and the BBC.

Productions that Facilities by ADF and Location One have worked on together include: The Crown, Top Boy, Lazarus, Becoming Elizabeth, Embankment, My Lady Jane, and The Gentleman.

For the year ended 30 September 2022, Location One generated unaudited revenues of £9.24 million and an adjusted EBITDA of £2.08 million. The Acquisition is expected to be immediately earnings accretive.  Location One's talented executive management, led by founder and MD Crispin Hardy, and other employees will be joining the Group.

Strategic Rationale

The Acquisition brings highly complementary services to ADF which will provide cross selling opportunities to the enlarged Group, as well as delivering efficiencies through central services. The Board believes that this is a significant step in becoming the premium one-stop-shop for film and high-end TV (HETV).

Consideration

Total consideration for the acquisition is £8.86 million, with 50 per cent. of the consideration payable in cash on completion, 30 per cent. payable in cash equally over three years, subject to EBITDA performance conditions, and 20 per cent. payable in ADF ordinary shares and subject to a 12-month lock in. The cash consideration will be funded from ADF's existing cash resources. The acquisition is expected to be immediately earnings accretive.

Commenting, Marsden Proctor, CEO, said:

"Facilities by ADF has worked with and admired Crispin and his team at Location One for many years as we have a long and excellent track record of working together on productions across the UK. With both businesses committed to providing high-quality equipment and customer service levels, along with having similar cultural values and impressive sustainability credentials, we are particularly excited by the strategic fit of the two organisations.

"This acquisition will enable us to provide the very best services the industry has to offer under one roof, as the UK continues to experience an increasing influx of inward investment and production and as we see the demand for content reaching record levels. It is yet another example of our commitment to accelerating growth since IPO and a reflection of the hard work across all teams at ADF. We see great opportunity for this acquisition and look forward to working with the Location One team to continue to build on this momentum."

Crispin Hardy, founder and CEO of Location One, commented:

"By joining forces with Facilities by ADF, we will be capable of bringing a compelling and expanded offering to the UK film and production industry at a time when demand for our products is at an all-time high. We are excited to continue building on our longstanding relationship with Mars and his team and aligning ourselves with a well-financed company to explore and accelerate growth opportunities moving forward - particularly in the environmental space where there is huge opportunity."

Admission of Consideration Shares

3,407,419 new ordinary shares (the "Consideration Shares") are to be issued as part of the transaction with application to be made to trading on the AIM market of the London Stock Exchange ("Admission"). The Consideration Shares will rank pari passu with the Company's existing ordinary shares. It is expected that Admission of the Consideration Shares will become effective and that dealings will commence at 8.00 a.m. on 6 December 2022. Following Admission, the Company will have 79,407,419 ordinary shares in issue with each ordinary share carrying the right to one vote.  The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

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OVERVIEW OF FACILITIES BY ADF

ADF's production fleet is made up of premium mobile make-up, costume and artiste trailers, production offices, mobile bathrooms (known as honey wagons), diners, school rooms and technical vehicles. The Group provides these production facilities and additional services after a planning process with the customer held well in advance of filming. In servicing productions, ADF staff are available on site and each production is allocated an account manager who acts as a single lead point of contact during filming.

The Group serves customers in an industry that has experienced significant growth in recent years, with additional demand driven by a material rise in the consumption of film and HETV content via streaming platforms such as Netflix, Disney and Amazon Prime. The UK film and TV industry has directly benefited during this growth due to the quality of its production facilities and studios, highly skilled domestic workforce, geography, accessibility to Europe, English language environment and strong governmental support. Major US streaming companies have now set up permanent bases in the UK, with the UK now Netflix's third largest operation after the USA and Canada.