4th December 2007
Acquisition Announcement and EGM
We are pleased to announce today that we have exchanged contracts for the acquisition of Hallam Healthcare Services (East Midlands) Limited (the "Acquisition") for an initial cash consideration of £2,600,000 and a total consideration of £4,742,000 (the deferred element is payable dependant on the performance of the business). The first £3,792,000 of the consideration will be funded via a Placing of 11,542,911 New Ordinary Shares at a price of 38.25 pence per share, conditional on shareholder approval. A circular convening an Extraordinary General Meeting ("EGM") at 9am on 27 December 2007 has today been posted to shareholders.
The Acquisition forms part of the Supporta's strategy to take advantage of growth opportunities within the fragmented domiciliary care sector.
Details of the Acquisition
£2,600,000 is initial consideration payable on the completion of the Acquisition, which is currently expected to be on 4 January 2008, and the remainder is deferred consideration payable based on the performance of the business in the 12 months following completion
Total consideration for the Acquisition is £4,742,000
The first £3,792,000 of consideration will be funded by the Placing and the remainder of the consideration will be funded through the Company's internal resources
Hallam Healthcare supplies a range of domiciliary care services to elderly and infirm people in their own homes predominantly under contracts with three local authorities
The carers provide a range of support services designed to help people maintain their independence and to continue living in their own homes. Services include:
cleaning
meal preparation
personal hygiene
bathing
dressing and undressing
getting into and out of bed
shopping
Hallam Healthcare currently employs 171 staff, of whom 152 are directly involved in the provision of care. The revenue streams for this business come from contracts with Sheffield City Council, Rotherham Metropolitan Borough Council and Derbyshire County Council. Hallam Healthcare was awarded two 'Block' contracts totalling 2,625 care hours per week with Sheffield City Council commencing on 2 April 2007 and 30 July 2007 respectively for three years, in each case with an option for the Council to extend for a further two years. Hallam Healthcare's contracts with Rotherham Metropolitan Borough Council and Derbyshire County Council are delivered on a 'Spot' basis.
Hallam Healthcare delivered circa 3,400 hours of care per week in the month of August 2007 and this acquisition will give Supporta Care regional presence within Yorkshire and Derbyshire.
Hallam Healthcare has net assets of £55,000 and had revenues of £1,278,000 and profits of £14,000 for the year to 30 June 2007. In April and July 2007 it was awarded two 'Block' contracts totalling 2,625 care hours per week with Sheffield City Council. As a result, the business is currently producing an annualised EBITA of £349,000 based on annualised performance from 1 July 2007 to 31 August 2007. The Directors believe this acquisition will be earnings enhancing.
The completion of the Acquisition is subject to shareholders passing the resolution to be put to shareholders at the EGM. Further details are set out below.
Details of the EGM
The Company also announces that it has today posted a circular to shareholders setting out the details of a resolution to be proposed to an Extraordinary General Meeting to be held on 27 December 2007 to approve the Placing of 11,542,911 new ordinary shares of 5 pence each in the Company at a price of 38.25p per share.
Up to £3,792,000 of the placing proceeds will be used to satisfy the consideration for the Acquisition. Following completion of the Placing, the Company will have net indebtedness of approximately £16.7 million and total bank facilities of approximately £21.4 million.
The EGM is to be held at 9.00 am on 27 December 2007 at the Company's offices of 3 Kingmaker Court, Warwick Technology Park, Warwick, Warwickshire CV34 6UT. To be valid, Proxy Forms must be returned to the Company's registrars no later than 9am on 25 December 2007.
John Jasper, Chief Executive said:
"This earnings enhancing acquisition gives us further momentum in our strategy to take advantage of growth opportunities within the fragmented domiciliary care sector and will complement our existing strong organic growth."
The full notice and details of the circular to shareholders is available within the Investor Relations centre of this website::INVESTOR RELATIONS
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