16 June 2016
Totally plc
("Totally", "the Company" or "the Group")
Acquisition of About Health Limited
The Board of Totally (AIM: TLY), the provider of a range of services to the healthcare sector, is pleased to announce that on 15 June 2016 it entered into an agreement to acquire the entire issued share capital of About Health Limited ("About Health" or "Target") for a maximum consideration of £7.7 million, based on the financial performance of About Health (the "Acquisition"). About Health provides community based health services under contract to 7 NHS Clinical Commissioning Groups with a focus on dermatology services across the UK. Completion of the Acquisition was effective on 15 June 2016.
Highlights
· Acquisition of About Health, a provider of high quality community based health services under contract to the NHS and a leader in the provision of dermatology and patient referral management services.
· Based on unaudited statutory accounts, About Health's revenue for the year ended 31 March 2016 was £2.27 million (2015: £1.21 million) and profit before tax was £0.26 million (2015: £0.10 million).
· The Board of Totally believe the acquisition to be earnings enhancing with revenue and profit growth potential.
· Initial consideration of £1.83 million funded out of Totally's existing cash resources.
· Deferred consideration wholly based on financial performance of About Health.
· The acquisition is a key step in the Company implementing its stated "buy and build" strategy and growing a diversified portfolio in the out of hospital care sector.
· Provides further opportunities across the Group for the development of new business models.
The Group's strategy is to become one of the leading providers of 'out of hospital care' across the UK.
The acquisition of Premier Physical Healthcare Limited in April 2016 was the first step in the Group's buy and build strategy and the Board of Totally are pleased to continue the implementation of this strategy with the acquisition of About Health. The Board believe that it is complementary in nature to the Group's existing operations and provides a diversified service offering in the UK out of hospital care sector.
About Health Limited
About Health has been providing community based health services under contract to the NHS since 2009 and the company is CQC registered. They provide community dermatology services to 18 clinics across Lancashire, Dorset and Hampshire. From 2013 to 2015 About Health was shortlisted for the Primary/Community Care Provider of the Year award at the annual Health Investor Awards. About Health is headquartered in Blackburn, Lancashire.
For the year ended 31 March 2016, About Health generated turnover of £2.27 million and a profit before tax of £0.26 million. As at 31 March 2016 net assets were £0.33 million.
With effective from Completion, Richard Benson (currently Operations Director of About Health) has been appointed as CEO of About Health.
Consideration for the Acquisition
The terms of the consideration payable under the acquisition agreement are as follows:
(a) a first instalment equal to the pre-tax profits of About Health for the year ended 31 March 2016 ("Y1") multiplied by 7 (the "Initial Consideration");
(b) a second instalment (the "Y2 Payment") equal to the pre-tax profits of About Health for the year ended 31 March 2017 ("Y2") (less the pre-tax profits of About Health referred to in paragraph (a) above) multiplied by 7;
(c) a third instalment (the "Y3 Payment") equal to the pre-tax profits of About Health for the year ended 31 March 2018 ("Y3") (less the pre-tax profits of About Health referred to in paragraph (b) above) multiplied by 7; and
(d) a final instalment (the "Y4 Payment") equal to the pre-tax profits of About Health for the year ended 31 March 2019 ("Y4") (less the pre-tax profits of About Health referred to in paragraph (c) above) multiplied by 7.
The Initial Consideration amounts to £1.83 million and has been paid in cash on completion to the vendors of About Health. The Company has satisfied the Initial Consideration from its existing cash resources.
The total consideration payable is capped at £7.7 million.
The pre-tax profit shall be the pre-tax profit of About Health for the relevant period and shall be derived from the Target's relevant audited annual accounts. In the event that the pre-tax profit for any of Y2, Y3 or Y4 is less than 80 per cent. of the previous year's pre-tax profit, Totally shall be entitled to clawback an amount equal to 7 times the full amount of the shortfall (and not just the shortfall below the 80 per cent. figure) from any earn out payments due for the following years.
The Y2 Payment will be paid in cash with the Y3 Payment and Y4 Payment both to be settled 80% in cash and as to 20% by the issue of new ordinary shares in the share capital of Totally (the "Consideration Shares"). The value of each Consideration Share will be a sum equal to the average of the closing middle market quotations for an ordinary share of Totally for the five business days prior to allotment.
Wendy Lawrence, Chief Executive of Totally, said:
"I am thrilled to be able to announce details of our latest acquisition of About Health. This is not only the next step in our 'buy and build' strategy' for the Totally Group but also provides opportunities for us to develop new business models across our subsidiaries and additional expertise to assist with our growth.
"Our commitment to growing the Group and delivering investor value remains our priority as we continue to seek new potential acquisitions that we believe will add value to our portfolio. I look forward to updating shareholders of our progress in due course."
Totally plc |
|
Wendy Lawrence, Chief Executive Bob Holt, Chairman |
020 3077 2212 07778 798 816 |
Allenby Capital Limited (Nominated Adviser & Broker) |
0203 328 5656 |
Nick Athanas / Nick Naylor / Alex Brearley |
|
Blytheweigh |
020 7138 3203 |
Tim Blythe / Camilla Horsfall |
|
