1 October 2015
CVS Group plc
(the "Company" or the "Group")
Acquisition of Alnorthumbria Veterinary Practice Limited ('Alnorthumbria')
CVS, the UK's leading provider of integrated veterinary services, is pleased to announce that on 30 September 2015 it acquired the entire issued share capital of Alnorthumbria, a provider of veterinary services in the North East of England comprising nine surgeries (the "Acquisition").
Alnorthumbria was founded in 2007 by the merger of two well established Northumberland practices, the Aln Veterinary Group and The Northumbria Veterinary Partnership. It operates nine sites across Northumberland at Amble, Fairmoor (two sites), Rothbury, Seahouses, Alnwick, Wooler, Ashington and Ponteland. Alnorthumbria employs 24 professional vets and over 100 staff in total.
In the year to 31 March 2015, Alnorthumbria generated turnover of approximately £5.7 million. Approximately 50% of turnover is from small animal work, 35% from large animal work and 15% from equine business. For the same period, Alnorthumbria generated an adjusted earnings before interest, tax and depreciation and amortisation of approximately £0.9 million and an adjusted profit before tax of approximately £0.8 million. Alnorthumbria's reported profit before tax for the year ended 31 March 2015 was £1.2 million, excluding dividends paid to the owner managers.
The maximum total consideration for the Acquisition is £7.7 million including costs. This figure is subject to adjustment based on the working capital and indebtedness of Alnorthumbria as at 30 September 2015.
£6.6 million of the consideration was paid in cash on completion. £0.9 million of the consideration is deferred and will be paid in two equal annual tranches, provided that turnover for the large animal and equine business acquired with Alnorthumbria remains above the level achieved for the year ended 31st March 2015. Further deferred consideration of up to £0.2 million will be payable if the total turnover of Alnorthumbria in the two years following the Acquisition is more than 111% above that for the year ended 31st March 2015. The consideration for the Acquisition will be paid using the Group's existing bank facilities.
Intangible assets and goodwill of approximately £6.7 million are expected to arise on acquisition.
Commenting, Simon Innes, Chief Executive Officer of the Group, said:
"Alnorthumbria is a strong fit with the Group's existing operations, significantly increasing the Group's presence in the North East and enhancing our large animal and equine business. As part of the CVS Group, Alnorthumbria is expected to benefit substantially from better purchasing power as well as overhead synergies."
Contacts:
CVS Group plc Simon Innes, Chief Executive Nick Perrin, Finance Director |
Tel: 01379 644 288 |
N+1 Singer (Nominated Adviser & Broker) Aubrey Powell Alex Wright |
Tel: 020 7496 3000 |
About CVS Group
CVS Group plc ("CVS" or the "Group") is the UK's leading provider of integrated veterinary services.
Established in 1999 to acquire and operate veterinary practices, the Group now has four key business areas: veterinary practices, diagnostic laboratories, pet crematoria and an on-line dispensary. In addition, the Group operates a buying group for third party practices and is developing a range of own brand veterinary medicines.
Following the acquisition of Alnorthumbria, CVS Group plc will operate 307 surgeries, up from 128 in 2007 at the time of the Group's AIM IPO. The practice division is also supported by the Group's referrals business which provides high value specialist services to both its own and third party practices and is a core area of development focus for the business.
The Group has five laboratories, which provide diagnostic services to third party and CVS owned practices, and 3 pet crematoria. Since 2013/14 the Group's laboratories have also begun to supply in-house analysers and reagents to the Group's own practices and externally.
The Group's on-line dispensary, Animed Direct, sells medicines, pet food and other animal related products in the UK and France.
To date, the Group has developed eight own brand products under the name MiPet, with more planned, and has over 200,000 members enrolled in its Healthy Pet Club Scheme, which provides preventative medicine to Group customers' pets as well as a range of discounts and other benefits.
The Group's MiVetClub buying group, launched in August 2013, uses its buying strength and range of complementary businesses to provide a unique offering of services to other practices, so as to strengthen their business as well as the Group's.
CVS also has a wide range of clinical and management training schemes for all of its employees. These include a unique graduate development programme, assisting newly qualified vets in the challenging transition from university to practice, and an innovative Nurse Academy, providing structured post qualification clinical training. The breadth of the Groups businesses provide for a career structure for vets that is unique to the industry.
In addition to various organic growth initiatives, the Group is committed to further expansion through acquisitions and has a successful track record of profitably integrating acquired businesses. The Group is aware that there remains a large number of independent businesses that recognise the benefits of becoming part of a larger specialist group and the breadth of service that it can offer. The CVS Group structure provides central administrative services including finance, human resources, marketing, health and safety, information technology and purchasing, allowing the practitioners in acquired businesses to concentrate on service provision, including clinical care.
For further information, please visit the Group's website, www.cvsgroupplc.com
