REG - Gateley (Holdings) - Acquisition of Richard Julian and Associates Ltd

Gateley (Holdings)Announcement

20/07/2023 07:00

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RNS Number : 5841G  Gateley (Holdings) PLC  20 July 2023

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."

 

- Ends -

 

Enquiries:

 Gateley (Holdings) Plc
 Neil Smith, Chief Financial Officer                                             Tel: +44 (0) 121 234 0196
 Nick Smith, Acquisitions Director and Head of Investor Relations                Tel: +44 (0) 20 7653 1665
 Cara Zachariou, Communications Director                                         Tel: +44 (0) 121 234 0074

                                                                                 Mob: +44 (0) 7703 684 946

 Liberum - Nominated Adviser and Broker

 Richard Lindley/Ben Cryer/Cara Murphy                                           Tel: +44 (0) 20 3100 2000

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