REG - Ten Alps PLC - Audited Preliminary Results <Origin Href="QuoteRef">TAL.L</Origin> - Part 2

Zinc MediaAnnouncement

28/09/2015 07:01

- Part 2: For the preceding part double click  ID:nRSb3151Aa 

COMBINATIONS 
 
Acquisition after reporting period- Reef Television Limited 
 
On 14th July 2015 the Group acquired 100% of the share capital of an English
registered company called Reef Television Limited. The Group paid initial
£2.55m cash for its 100% holding with a further £3m payable via redeemable
loan notes and shares on certain earn out targets being met between 2016 and
2018. The balance sheet acquired was £0.92m in net assets. The directors
consider the £3m deferred consideration will be met over the 3 year period. 
The assets and liabilities arising from the acquisition are as follows: 
 
                                                Fair Value               
                                    Book Value  Adjustments  Fair Value  
                                    £'000       £'000        £'000       
 Intangible assets                              2,950        2,950       
 Property, plant and equipment      34          -            34          
 Trade and other receivables        536         -            536         
 Cash and cash equivalents          2,584       -            2,584       
 Trade and other payables           (1,634)                  (1,634)     
 Current tax liabilities            (601)       -            (601)       
 Deferred tax                       (2)         (590)        (592)       
 Net assets acquired                917         2,360        3,277       
 Goodwill capitalised                                                    
 Consideration given                                         5,522       
 Satisfied by:                                                           
 Cash                                                        2,522       
 Deferred contingent consideration                           3,000       
                                                             5,522       
 
 
The fair value adjustments made to book value relate to the intangible assets
identified on the acquisition.  Goodwill relating to the acquisition of Reef
amounted to £2,244,570. 
 
Earnout Details 
 
The earnout consists of three elements: 
 
·      Loan Note Consideration of up to £1.5 million 
 
·      Deferred Consideration of up to £1.5 million and 
 
·      Additional amount of earn out consideration 
 
The Loan Note Consideration and the Deferred Consideration will be settled in
cash or Ordinary Shares, at the Company's discretion, subject to a maximum of
50 per cent. of the Loan Note Consideration and the Deferred Consideration
being able to be settled in Ordinary Shares. Any issue of new Ordinary Shares
to the Vendors will be subject always to the resultant shareholding of the
Vendors being not greater than 29.99 per cent. of the issued share capital of
Ten Alps, as enlarged by the issue of that tranche of Ordinary Shares. The
Ordinary Shares will be valued at the average mid-market closing share price
of the Company over the five Business Days prior to the finalisation of the
relevant accounts. 
 
The Loan Note Consideration is redeemable and the Deferred Consideration is
payable in three tranches of up to £500,000 each, subject to the level of
gross profitability of Reef Television for the financial years ended 30 June
2016, 30 June 2017 and 30 June 2018. In respect of the 2016 financial year,
the maximum 
 
Loan Note Consideration and Deferred Consideration payment of £1,000,000 is
subject to Reef Television achieving at least £1,800,000 in gross profits and
to be adjusted downwards thereafter on a straight-line basis to a minimum
level of £1,500,000, below which point none of the first tranche of Loan Note
Consideration and Deferred Consideration will be paid. The same performance
metrics will apply to the second and third tranches of Loan Note Consideration
and Deferred Consideration due in respect of the 30 June 2017 and 2018
financial years, with the target gross profit ranges of £2,000,000 to
£1,500,000 and £2,200,000 to £1,500,000, respectively. 
 
If there is an over-achievement in either of the 2016 or 2017 years the excess
will be carried forward to the next financial year of assessment and if there
is an over-achievement in either of the 2017 or 2018 years the Vendors will
have the ability to claim back amounts not paid due to under-performance in
previous years. An additional amount of earn-out consideration is payable by
the Company if the aggregate gross profit for the three years exceeds £6
million. Subject to certain conditions, the Company will pay 50 per cent. of
such gross profit excess to the Vendors in either cash or by the issue of
Ordinary Shares (in respect of up to 50 per cent. of this additional
consideration) at the Company's option. No provision has been made for this
element of deferred consideration, due to the uncertainty of future gross
profit revenue streams being greater than £6m over the three year period. 
 
7) SHARE CAPITAL 
 
                                                          2015         2014           
                                                          Shares       Share capital  Share premium  Shares       Share capital  Share premium  
                                                                       £'000          £'000                       £'000          £'000          
 Authorised ordinary shares of 2p each                    No Maximum   N/A                           No maximum   N/A                           
 Allotted, called up and fully paid ordinary of 2p each:                                                                                        
 At start of year                                         276,666,012  5,534          15,228         276,666,012  5,534          15,228         
 Shares issued as consideration                           -            -              -              -            -              -              
 Shares issued as remuneration                            -            -              -              -            -              -              
 Shares issued as private placement                       -            -              -              -            -              -              
 At end of year /year                                     276,666,012  5,534          15,228         276,666,012  5,534          15,228         
 
 
This information is provided by RNS
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