20 July 2023

Gateley (Holdings) Plc

("Gateley" or the "Group")

(AIM:GTLY) 

Acquisition of Richard Julian and Associates Limited

and

Total Voting Rights

Gateley, the professional services group, is pleased to announce the acquisition of Richard Julian and Associates Limited, trading as RJA Consultants ("RJA"), for total consideration of not more than £6 million (the "Acquisition") including, subject to certain revenue targets being achieved, an earn out based on the EBITDA achieved in each twelve-month period expiring 31 March 2024 and 31 March 2025.

Background to RJA

Established by founder and managing director, Richard Julian, RJA is a chartered surveying practice, providing quantity surveying and project management services across a variety of construction sectors. It specialises in the provision of these services to organisations that deliver affordable housing, a resilient sector which is underpinned by high levels of grants to support delivery of the Government's housing targets.

Richard Julian and directors Steven Collin, Liza Julian, Hardeep Kooner and Chris Clubb, will continue to work as part of the RJA management team post Acquisition.

The company employs approximately 50 staff based in Nottingham and Leicester.

In the financial year ended 31 March 2023, RJA generated revenue of c.£3.9 million, corporatised profit before tax of c.£0.8 million and organic revenue growth of 65% against the prior year.

Acquisition rationale

RJA is a fast-growing business that complements the existing market leading expertise within Gateley Legal's residential development and construction teams. Its core market, which is affordable housing, is a buoyant sector and the deeper reach into that market adds further resilience to the Group's Property Platform.

In addition, RJA's service offerings align with expertise elsewhere on Gateley's Property Platform. In particular, its services to the UK property insurance market further strengthen Gateley Smithers Purslow and Gateley Vinden's market-leading positions in that sector.

Terms of the Acquisition

Under the terms of the Acquisition agreement, Gateley will pay initial consideration of £3.93 million (the "Initial Consideration"). The Initial Consideration will be satisfied as to approximately £2.03 million in cash and £1.9 million by the allotment and issue of new ordinary shares of £0.10 each in Gateley ("Consideration Shares").

The cash consideration is being funded from the Group's revolving credit facility. The board expects the Acquisition to generate operational synergies and be immediately earnings enhancing.

Issue of the Consideration Shares and Total Voting Rights

Application will be made to the London Stock Exchange for the 1,192,163  Consideration Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will take place at 8.00am on 25 July 2023.

The Consideration Shares will rank pari passu in all respects with the existing ordinary shares of £0.10 each in Gateley ("Ordinary Shares"), including the right to receive all dividends declared, made or paid after completion.

Following Admission, Gateley's total issued share capital will comprise 127,860,168 Ordinary Shares. This number may be used by shareholders in Gateley 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 Gateley under the FCA's Disclosure Guidance and Transparency Rules.

Commenting on the Acquisition, Rod Waldie, Chief Executive Officer of Gateley, said:

"I am delighted to welcome the team from RJA, who are already well known by our colleagues in Gateley Smithers Purslow. There are common threads between the two teams and across our Property Platform, bringing opportunities to increase market share, as well as target new markets and workstreams. They have considerable expertise in the construction market and specifically in resilient sectors such as affordable housing and insurance services.

"RJA has a strong track record of growth, excellent relationships with clients, a dedicated and positive culture and an ambitious management team, qualities which closely match Gateley's business and culture."

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