REG - MHA PLC - Proposed Acquisition

MHAAnnouncement

07/05/2025 07:00

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RNS Number : 5714H  MHA PLC  07 May 2025

 

7 May 2025

 

MHA plc

("MHA", the "Company" and together with its subsidiaries the "Group")

 

Proposed Acquisition of Baker Tilly South East Europe

 

MHA (AIM: MHA), a leading professional services provider of audit and
assurance, tax, accountancy and advisory services is pleased to announce that
later today, at the Baker Tilly South East Europe Holdings Limited ("BTSEE")
conference in Athens, delegates will be informed that the Company has entered
into a heads-of-terms agreement (the "Agreement") regarding the proposed
acquisition of BTSEE, for a total maximum consideration of approximately €24
million (the "Acquisition"), with the final consideration to calculated based
on completion accounts and subject to completion of final due diligence.

 

In line with its acquisition strategy, and as stated in the Company's recent
Admission Document, MHA has been pursuing strategic cross-border M&A
opportunities, including other existing members of the Baker Tilly
International Network which are already well-known to MHA.

 

The Group identified BTSEE as an ideal fit for MHA, noting its strong
financial track record, growth potential, alignment of culture and
complementary services to MHA. BTSEE is a leading professional services firm
offering a comprehensive range of services to clients in Cyprus, Greece and
South East Europe, predominantly in audit, tax, advisory, legal and corporate
services. It has particular strengths within Cyprus, where it is the fifth
largest accountancy firm, after the Big Four, in the financial and government
sectors and in the audit of large clients, including a number of PIEs. BTSEE
has 13 Partners and approximately 400 employees. The Acquisition would
represent a key step in the Company's growth strategy, providing MHA with a
presence in mainland Europe and an alliance with a local partner that is well
established in the region and with whom MHA already has a close working
relationship.

 

For the 12 months ended 31 December 2024, BTSEE generated sales of €19.4
million, adjusted EBITDA of €3.9 million and profit before tax of €2.5
million, after adjusting for partner remuneration. BTSEE's revenue has grown
over the past four years at a compound average growth rate of 9% per annum. As
at 31 December 2024, BTSEE had net assets of approximately €1 million. The
Acquisition, should it complete, is expected to be earnings enhancing within
the first full financial year following completion.

 

Pursuant to the Agreement, MHA expects to pay a fixed up front cash
consideration of €6.5 million, from the Group's existing cash resources,
plus €17.5 million to be satisfied through the issue of new ordinary shares
in the Company at a price of £1.00 per share, to the vendors of BTSEE.
Consistent with the approach taken by MHA Partners on Admission, it is
intended that 10% of the total consideration will be used to fund the
Company's Employee Benefit Trust. The share consideration will be subject to
the same lock-in and clawback arrangements as apply to the shares acquired by
the existing MHA Partners on the IPO of the Company.

 

The Company notes that the Acquisition remains conditional on, inter-alia,
completion of final due diligence, agreement of final terms and the entering
into of a sale and purchase agreement. The Company will make a further
announcement in due course once terms have been finalised and the Acquisition
has exchanged.

 

Geoff Barnes, Chair of MHA, commented:

 

"As stated at the time of our recent IPO, strategic M&A forms a key
component of our medium-term growth aspirations, and the intended acquisition
of BTSEE as announced today demonstrates continued progress against our
disciplined M&A roadmap. With a good understanding of both MHA and BTSEE,
I believe their ambition and close strategic fit will create an even bolder
organisation serving its clients and offering progression opportunities to
staff. We look forward to providing a further update in due course."

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

 

Contacts:

 

 MHA                                                                            www.mha.co.uk (http://www.mha.co.uk/)
 Rakesh Shaunak, Chief Executive Officer                                        via Alma
 Steven Moore, Chief Financial Officer

 Cavendish Capital Markets Limited (Nominated Adviser & Broker)
 Stephen Keys, Callum Davidson, Katy Birkin, Dan Hodkinson (Corporate Finance)  +44 (0)20 7220 0500

 Michael Johnson (Sales)
 Tim Redfern, Sunila de Silva (ECM)

 Alma Strategic Communications                                                  mha@almastrategic.com (mailto:mha@almastrategic.com)
 Andrew Jaques, Josh Royston, Hilary Buchanan, David Ison, Will Ellis Hancock,  +44 (0)20 3405 0205
 Sarah Peters

 

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