RSM Tenon Group (LON:TNO) , the fully listed accounting and businesses services group, has been quick to take advantage of the demise of Vantis Plc (LON:VTS) , which fell into administration yesterday (as we anticipated!), by snapping up certain business and assets of Vantis for a cash consideration of up to £6.8 million, from the administrators of Vantis.
The assets acquired comprise the trade and assets of three of Vantis’ Business and Advisory offices, the Thames Valley Recovery practice and the trade and assets of Vantis’ Financial Management business i.e. all the best bits! The initial consideration is only £5.7m in cash on completion, with £1.1m deferred subject tothe realisation of certain debtors acquired. They estimate a further 3.6m will incurred integrating everything into RSM Tenon, which sounds somewhat over prudent and the transaction costs related are estimated at £0.5 million.Not surprisingly the acquired assets are considered to be earnings enhancing in the first full year of ownership by RSM Tenon.
The Acquisition is being financed through the Group’s existing bank funding, which is to be extended to maintain the level of headroom within the Group. An additional £10 million revolving credit facility will be provided by Lloyds TSB Bank plc on terms consistent with the Group’s existing facilities.For the financial year ended 30 April 2010 the Acquired Assets generated total revenues of approximately £27 million and achieved a profit contribution (before central costs) of approximately £4.1 million. Looks a really good deal although this is a people business so there is still much to do on the integration front. One can safely assume that the management of RSM Tenon were closely following the saga of Vantis and ready to pounce. Let’s just hope that RSM Tenon don’t go the same way as Vantis by piling up the debt on a reckless acquisition spree!
