REG - Van Elle Holdings - Acquisition of Albion Drilling Group

Van Elle HoldingsAnnouncement

29/10/2024 07:00

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RNS Number : 9504J  Van Elle Holdings PLC  29 October 2024

29 October 2024

 

Van Elle Holdings plc

('Van Elle', the 'Company' or the 'Group')

 

Acquisition of Albion Drilling Group

Issue of Equity & TVR

 

Van Elle Holdings plc (AIM: VANL), the UK's largest ground engineering
contractor, is pleased to announce that it has acquired the entire issued
ordinary share capital of Albion Drilling Holdings Limited ("Albion"), a
market leading specialist piling and drilling business, for total
consideration of up to £3.5m, of which £0.5m is net cash acquired (the
"Acquisition").

 

Based in Stirling, Albion is a leading specialist piling and drilling business
with a strong track record of delivering complex infrastructure projects
across Scotland. The business is privately owned, founded in 1986, providing a
range of specialist piling, technical drilling and geotechnical engineering
including quarry and close-proximity blasting, marine drilling, ground
stabilisation and rock anchoring.

 

Albion is a complementary and strategically aligned bolt-on acquisition, which
expands Van Elle's presence in Scotland and further extends the Group's
technical capabilities. The business has a high-quality rig fleet and skilled
workforce, and a strong track record in infrastructure projects, with a
blue-chip customer base that complements the Group's. Albion's track record in
the energy sector aligns to the Group's strategy, where Van Elle is currently
delivering two energy infrastructure schemes in Scotland and expects to
mobilise further, larger schemes in early 2025.

 

Albion will be aligned to the Group's Specialist Piling division, which shares
a similar operating model.  The Group will co-locate its facilities at
Stirling and integrate its resource to grow its Scotland-based capability to
meet the demand of a series of major long-term opportunities. The Acquisition
is expected to be earnings accretive in the first full year of ownership and
the Board believes there are modest cost synergies to be achieved.

 

Acquisition consideration

The initial consideration comprises cash consideration of £2.1m, funded from
the Group's existing cash resources and partial use of its funding facility,
and £0.6m satisfied through the issue of 1,459,817 new ordinary shares of 2
pence each in the Company ("Ordinary Shares") at an issue price of 40.1 pence
per ordinary share, being the 30-day average closing mid-market share price in
the period to 25 October 2024 (the "Consideration Shares"). The Consideration
Shares are subject to a 12-month lock up, subject to customary carve-outs,
followed by a 12-month orderly market arrangement. In addition, deferred
consideration of up to £0.8m will be paid in cash, subject to the achievement
of certain criteria over a two-year period.

 

Financial performance

For the year ended 31 January 2024, Albion delivered (unaudited) revenue of
£5.5m, an EBITDA of £1.0m and profit before tax of £0.8m. Net assets at the
same date were £2.6m. The Group's assessment of the market valuation of net
assets acquired exceeds the total consideration of £3.5m.

 

Managing Director, Jim King, and the entire workforce consisting of 31
employees will become part of the Van Elle Group, and the business will
continue to operate under the Albion brand. Jim King will assume a wider role
as Van Elle's director for Scotland, reporting to Chief Operating Officer,
Malcolm O'Sullivan.

 

Chief Executive, Mark Cutler, commented: ''The acquisition of Albion
represents an exciting and important step towards the delivery of our growth
strategy in the energy sector. It also broadens the Group's range of
specialist capabilities and customer base. Albion is a highly regarded
specialist contractor with complementary capabilities and an experienced
workforce who will fit perfectly into the Group's operating structure. May I
welcome Jim King our new Scotland director, and all Albion employees to the
Van Elle Group."

 

Issue of equity and total voting rights

 

Application has been made for the 1,459,817 Consideration Shares to be
admitted to trading on AIM of London Stock Exchange plc ("Admission").  The
Consideration Shares will rank, pari passu, with the Company's existing
Ordinary Shares, and it is expected that Admission will become effective, and
that dealings will commence in the Consideration Shares at 08.00 a.m. on 30
October 2024.

 

In accordance with the FCA's Disclosure Guidance and Transparency Rules (DTR
5.6.1) the Company notifies that following Admission, its issued share capital
will consist of 108,200,751 Ordinary Shares. There are no Ordinary Shares held
in treasury.  Shareholders may therefore use this figure 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 Company under
the FCA's Disclosure Guidance and Transparency Rules.

 

Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014)
("MAR") prior to its release as part of this announcement and is disclosed in
accordance with the Company's obligations under Article 17 of those
Regulations.

 

More information on Albion can be found on its website at:
www.albiondrillinggroup.co.uk/ (http://www.albiondrillinggroup.co.uk/)

 

 

For further information, please contact:

 Van Elle Holdings plc                                   Via Walbrook

 Mark Cutler, Chief Executive Officer

 Graeme Campbell, Chief Financial Officer

 Peel Hunt LLP (Nominated Adviser and corporate broker)  Tel: 020 7418 8900

 Ed Allsopp

 Charlotte Sutcliffe

 Tom Graham

 Walbrook PR Limited                                     Tel: 020 7933 8780

                                                         or vanelle@walbrookpr.com
 Tom Cooper                                              07971 221 972

 Nick Rome                                               07748 325 236

 

 

About Van Elle Holdings plc:

 

Van Elle Holdings is the UK's largest specialist geotechnical engineering
contractor. Formed in 1984 and listed on AIM in 2016, the Company provides a
wide range of ground engineering techniques and services including ground
investigation, general and specialist piling, rail geotechnical engineering,
modular foundations, and ground improvement and stabilisation services.

 

Van Elle operates through three divisions: General Piling, Specialist Piling
and Rail, and Ground Engineering Services; and is focused on diverse end
markets including residential and housing, infrastructure and regional
construction - across which the Group has completed more than 20,000 projects
over the last 35 years.

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