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For immediate release
11 June 2019
Aquila Services Group plc("Aquila")
Acquisition of Oaks Consultancy Ltd ("Oaks")
Aquila, a company established to acquire and operate growing businesses in the affordable housing services sector, is pleased to announce the acquisition of Oaks Consultancy Ltd, an education and sports consultancy. The consideration is based on Oaks financial performance to the year ended 31 March 2019. A further payment will be subject to Oaks final accounts for the year ended 31 March 2021. The total consideration is capped at £1.7 million funded by a combination of cash and new shares in Aquila.
Information about Oaks
Founded by Mark and Adam Walker in 2008, Oaks has a unique market position and established track record in education and sports related consultancy, and in the last few years has grown its core client base which includes the community and voluntary sector, local authorities, membership organisations, and socially-minded private sector organisations.
The services Oaks provides focuses on three core areas; strategy, business planning and income generation and cover business development components such as:
§ Organisational strategy
§ Income diversification and growth
§ Governance review and advice
§ Sustainability planning
§ Monitoring and evaluation
§ Training and mentoring
The close-knit team of 18 at Oaks deliver flexible and reliable services in a tailored and personal format. Based in Birmingham city centre and working across the UK, they have plans to grow internationally in the next 3 years.
This client profile provides strong opportunities for collaboration across the subsidiaries of Aquila Services Group "The Group": Altair, ATFS, and the Aquila investments in IT consultancy 3C, and Fintech platform AssetCore.
Derek Joseph - Chairman of Aquila commented:
'Our strategic business plan is to be the 'one stop shop' for all the professional services needed by our current and future clients operating in our market sector. The acquisition of Oaks, with its established reputation in the education and sports sector, offers these specialisms in areas where we see our core clients diversifying and provides opportunities to grow our key services to clients in these wider sectors. This is another important step in our business journey.
We are delighted to welcome the experienced Oaks team, particularly with their reputation for innovation, and we look forward to them being one of the engines of growth for the group.'
Mark and Adam Walker from Oaks Consultancy Ltd, commented:
"Oaks has grown rapidly in recent years and our team has never been stronger, working with some of the most high-profile and exciting sporting institutions and breaking into education with an offer we firmly believe is unique in the sector. Joining Aquila Services Group now is a great opportunity to grow and build on our successes to date with a partner that shares our culture, skills and vision, and our commitment to continue delivering fantastic results for our clients. We are excited about the potential growth of Oaks within the group and are looking forward to exploring new opportunities in the housing and regeneration sector".
Changes to Group Structure
Following the acquisition, the Group will have capacity to support a wider portfolio of clients, with a broader range of services. The Board of Aquila continues to seek out and evaluate further complementary acquisition opportunities and with this objective in mind is restructuring its governance to make Steve Douglas, Group Chief Executive, with Fiona Underwood, taking responsibility as CEO of Altair.
Details of the Acquisition Agreement ("SPA")
The initial consideration is based on a multiple of operating profit (adjusted for salaries) of Oaks to 31 March 2019 together with an adjustment by reference to net current assets of Oaks on completion, 10th June 2019 ("Completion"), subject to a Completion Account mechanism.
The unaudited management accounts of Oaks, at 31 March 2019, report turnover for the 12 months of £908,980 and profit before taxation of £253,552 not adjusted for salaries.
In addition to the Initial Price, an earn out equal to up to 2.8 times the adjusted increase in the profit of Oaks from March 2019 ("Adjusted Profit") to March 2021 will be due and payable subject to Oaks having achieved specified minimum profit growth targets.
The maximum aggregate consideration payable to the founders of Oaks ("Sellers"), including the earn out payment, will not exceed £1,700,000. Any payment to the Sellers is 35% in cash and 65% in consideration shares which, when issued, will rank pari passu with the existing ordinary shares in issue of Aquila (the "Consideration Shares"). The value of each Consideration Share shall be a sum equal to the average of the closing middle market prices for an ordinary share of 5p each ("Ordinary Share") (as shown by the daily Official List of the London Stock Exchange) for each of the five Business Days immediately preceding Completion being the value of £0.288.
A payment in cash of £201,950.70 was made to the Sellers on account of the Initial Price. The balance will follow determination of the Completion Accounts and Adjusted Price Statement, at which point the Sellers will be paid a sum in cash equal to the amount by which 35% of the Initial Price exceeds the previous cash Payment and the remaining balance shall be satisfied by the allotment and issue of Consideration Shares at the price of £0.288 per Consideration Share.
Based on the Sellers indicative calculations, the number of Consideration Shares to be issued to satisfy the Initial Price is expected to be 2,343,205 Ordinary Shares in the Company to be confirmed under the Completion Account mechanism following determination of the Completion Payment. A further announcement regarding issue, allotment and admission to trading of the Completion Shares will be made in due course.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
For further information please visit www.aquilaservicesgroup.co.uk or contact:
Aquila Services Group plc
Group Chief Executive
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Tel: 020 7628 3396
Notes to editors:
About Aquila Services Group plc
Aquila is the London Stock Exchange listed parent company of: Altair Consultancy and Advisory Services Ltd, a specialist housing consultancy; Aquila Treasury and Finance Solutions Ltd, an FCA registered subsidiary of treasury management advisors; and Oaks Consultancy Ltd, specialist consultancy in sport, education and charities. Aquila also has investments in 3C Consultants Ltd, one of the largest providers of IT consultancy to the UK social housing sector, and AssetCore Limited, a platform for storing and managing loan security information with links to lenders, legal advisors, and security trustees.
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