Birch Partners, an investment vehicle, has agreed to acquire the entire issued share capital of Paycorp Group for an initial consideration of GBP9.78 million, to be satisfied by the issue of the initial consideration shares.
Deferred consideration of up to a maximum of GBP4.03 million to be satisfied by the issue of the deferred consideration shares will also be payable subject to certain performance criteria.
Birch Partners has announced that it is seeking to raise GBP276,000 by way of the placing, the proceeds of which will be used to satisfy some of the costs of the acquisition and admission. Existing funds in the company will be used to expand the business either by way of additional working capital or to part-fund potential acquisitions which may be identified in the future.
The acquisition constitutes a reverse takeover pursuant to the PLUS Markets rules and is therefore subject to the approval of the shareholders. Following completion, the concert party’s aggregate shareholding in the company will amount to 850 million ordinary shares, representing 76.2% of the enlarged issued share capital.
As the concert party will hold more than 30% of the then enlarged issued share capital, in normal circumstances the concert party would be required under rule nine of the code to make a general offer in cash to the shareholders to acquire all the remaining shares of the company.
Conditional on admission, John Caliguri and Adrian Roche will join the board of Birch Partners as executive directors and David Southworth will join the board as a non-executive director and acting finance director. Emma Myers will step down from the board upon completion of the proposals.