FOR IMMEDIATE RELEASE 7.00am 28 March 2018
Manx Financial Group PLC (the 'Group')
Acquisition of the entire issued share capital of Blue Star Business Solutions Limited
Manx Financial Group PLC announces that Bradburn Limited, its wholly owned subsidiary, has entered into a binding agreement to acquire the entire issued share capital of Blue Star Business Solutions Limited ("BBSL") subject only to Financial Conduct Authority ("FCA") approval of the proposed change of control. An application to the FCA has been submitted and completion is expected to occur within 30 days.
BBSL was formed in 2004 and is based in Hampshire and regulated by the FCA and holds Credit Broking Authorisations. The two co-founders of BBSL, Marcus Gregory and Mark Hayman, have developed a niche brokerage which focuses on delivering excellent customer service to small and medium sized businesses in the UK that require funding for IT equipment amongst other assets. For its financial year to the end of March 2018, BBSL will fund in excess of £9 million of loan proposals and as at 31 March 2017 reported an unaudited profit of £101,252 after tax. Post-acquisition the Group will invest in BBSL to allow it to grow profitably by gaining market share and through its banking subsidiary, Conister Bank Limited, write the majority of its funding requests.
The board of directors of BBSL will be strengthened by the appointment of Douglas Grant, the Group's Finance Director, and Denham Eke, the Group's Chief Executive Officer.
The main terms of the transaction are as follows:
· An initial payment of £1,500,000 in cash at completion;
· 50% of the enlarged earnings before interest, tax, depreciation and amortisation ("EBITDA") in BBSL for 3 years post completion arising from ongoing trading of the BBSL following completion of the acquisition; together with
· 50% of the incremental net profit that the Bank realises as a result of it taking up BBSL loan proposals post completion until the third anniversary of the transaction. This will be paid annually with a final payment in year 4 for the unrealised discounted tail of the portion;
· The maximum aggregate consideration payable by Bradburn (including earn-out consideration) is capped at £4,000,000.
* net profit is defined as the amount of income earned (less costs) realised by the Bank arising from new lending which has been originated by BBSL
This acquisition is part of the Group's strategy to increase its distribution in the UK broker market.
Douglas Grant, Group Finance Director, commented: "The asset backed finance market in the UK recorded its seventh year of successive growth last year, led by the broker finance market which grew 14% year on year. This is a market Conister Bank is active within and indeed wrote more than £16 million of business last year. This acquisition will bolster our presence in this attractive market sector and act as a catalyst for future growth. Both Marcus and Mark have great experience in the UK broker market and are keen to grow the business with our assistance and I am equally keen to work with them to achieve this goal."
For further information: -
Manx Financial Group - http://www.mfg.im/
Blue Star Business Solutions Limited - http://www.bluestarleasing.com/
Contacts:
Manx Financial Group PLC
Denham Eke, Chief Executive
Tel: +44 (0) 1624 694694
Beaumont Cornish Limited
Roland Cornish/James Biddle
Tel: +44 (0) 20 7628 3396
Britton Financial PR
Tim Blackstone
Tel +44 (0) 7957 140416
