A second acquisition has been announced for the recently established Commercial Finance Division of 1pm plc, in the shape of Positive Cashflow Finance (Holdings) Limited and its trading subsidiary (the “Acquisition”).
The consideration for the Acquisition will be up to £9.0 million made up of a payment of £4.3 million in cash on completion, a further £2.2 million in 5pct loan notes redeemable in quarterly payments over the 13 calendar quarters following completion, commencing on 30 September 2017, and up to £2.5 million in new ordinary shares at 60p per share based on a three year earn-out, conditional on financial targets.
Positive Cashflow is a Manchester-based business which provides invoice finance facilities of between £10,000 and £1 million to businesses across a broad range of industries. The company has over 190 customers and employs 24 members of staff at offices in Manchester and Birmingham. Revenue for the year ended 30 November 2016 was £4.1 million with adjusted profit before tax of £1.1 million. As at 30 November 2016, the company had a loan book of £23 million and receivables of £46 million. The management team, led by David Smith, is highly experienced and well respected and will continue to manage the business within the 1pm group following the Acquisition.
The Directors believe that Positive Cashflow, which services clients predominantly in the North and Midlands will complement Gener8 Finance, which was acquired by the Group in May 2017 and which services clients predominantly in the South. Following the Acquisition, the Commercial Finance Division will be comparable in size to the Group’s Asset Finance and Loans divisions.
Ian Smith, 1pm’s CEO, said, “Following on from last month’s acquisition of Gener8 Finance, the acquisition of Positive Cashflow now completes the establishment of the group’s new Commercial Finance division and is a key step in the implementation of our strategy to provide a comprehensive range of business finance products to SMEs. 1pm now provides Asset Finance, Invoice Finance and Business Loans to the SME sector throughout the UK, acting both as a funder with approximately £120 million of own-book lending, and as an established broker to other funders.”