STBR Southern Br

 

TIDMSTBR 
 
RNS Number : 2276E 
Southern Bear PLC 
16 December 2009 
 

16 December 2009 
 
 
 
 
Southern Bear Plc 
("Southern Bear" or the "Company") 
Conditional Acquisition by Southern Bear of Intumescent Protective Coatings 
Limited ("IPCL") and Related Fundraising 
 
 
Southern Bear, a holding company focusing on investments in the support 
services, industrial and engineering sectors of the UK and Europe, is pleased to 
announce that it has conditionally agreed to acquire the entire share capital of 
IPCL, a company whose principal activity is the application of fire protective 
coatings to steel structures, for a consideration of up to GBP4.83 million 
(subject to adjustment based on IPCL's cash and net asset positions at 
completion). The acquisition consideration will be satisfied as to up to GBP3.45 
million in cash with the remainder to be satisfied in new ordinary shares in the 
Company, as described in more detail below. The acquisition is subject to 
certain conditions, including completion of the Placing (as defined below), and 
the Company will make a further announcement once these conditions have been 
satisfied. 
 
IPCL has a successful track record of more than 10 years. It provides a range of 
contracting services with a focus on the application of fire protective coatings 
to steel structures and related procedures. IPCL has a wide range of high 
profile and prestigious clients which include multi-national organisations. As 
at 31 July 2009, IPCL had profits before tax of GBP1.04 million and net assets 
of GBP0.82 million. 
 
Under the terms of the sale and purchase agreement (the 'Agreement'), the 
consideration is payable by way of an initial cash payment of GBP2.92 million 
and initial consideration shares (the 'Initial Consideration Shares') to the 
value of GBP0.875 million to be issued at 1.25p each. The amount of the initial 
cash payment is subject to downwards adjustment and the number of shares to be 
issued is subject to upwards adjustment based on IPCL's cash and net asset 
positions at completion. In addition, two cash payments of GBP0.26 million and 
GBP0.27 million respectively are deferred until one and two years post 
completion. A further two payments of GBP0.25 million each (payable 75% in cash 
and 25% in ordinary shares in the Company) are due to be paid subject to earn 
out provisions based on the profit before tax of IPCL in the years ending 31 
July 2010 and 31 July 2011. On completion, the Company will get the benefit of 
the retained cash in the balance sheet of IPCL, which is expected to be in 
excess of GBP1 million. 
 
The Company intends to fund the initial cash consideration of GBP2.92 million 
(as adjusted) out of the aggregate proceeds of a placing of the Company's 
ordinary shares and of an issue of up to GBP3 million of convertible loan notes 
to existing shareholders and new investors. In respect of this, Astaire 
Securities plc has raised GBP320,000 by way of a conditional placing of 
25,600,000 new ordinary shares of 0.5 pence each in the capital of the Company 
(the 'Placing Shares') at a price of 1.25 pence per share (the 'Placing'). The 
Placing is not being underwritten and is conditional, inter alia, on the issue 
of the convertible loan notes. A further announcement will be made in respect of 
the issue of the convertible loan notes in due course. 
 
Application is being made for the 70,000,000 Initial Consideration Shares and 
the 25,600,000 Placing Shares to be admitted to trading on AIM, which is 
expected to take place on 21 December 2009. 
 
Jon Pither, Chairman of Southern Bear, commented 'The Board believes that this 
acquisition will strengthen the support services arm of the Company 
significantly and enhance its existing revenue streams. Furthermore, the 
acquisition will give critical mass to Southern Bear's operations and 
demonstrates clear commitment to delivering a wider range of services to 
customers. 
 
 
 
 
 
For further information, please contact: 
 
 
Southern Bear plc 
Steve Hancock - CEO 
Tel: +44 (0) 1926 888302 
 
 
Nominated Adviser: 
Grant Thornton Corporate Finance 
Gerry Beaney/Adam Suggett 
Tel: +44 (0) 20 7383 5100 
 
 
Broker: 
Dowgate Capital Stockbrokers Limited 
Neil Badger 
Tel: +44 (0)1293 517744 
 
 
Astaire Securities plc 
Katie Shelton 
Tel: +44 (0)20 7448 4400 
 
 
Financial PR: 
Bishopsgate Communications 
Robyn Samuelson/Siobhra Murphy 
Tel: +44 (0) 20 7562 3350 
 
 
Notes to Editors: 
 
 
Southern Bear plc is a holding company focused on investments in the support 
services sectors of the UK and Europe. The Company's strategy is to acquire 
businesses which typically have a turnover of up to GBP10 million and a strong 
second tier management. Its shares were originally listed on AIM in 2005. 
 
 
The Company's operating subsidiaries are Tarvail Limited, Tarvail Design 
Limited, Towerinput Limited, Towerinput Distribution Limited, Phoenix Dynamics 
Limited, BGC Limited, Fenhams Limited and CFC0084 Limited t/a Ronald Thompson. 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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