Acquisition of Imperial Tankers Limited – Maximum Consideration £7 million
Hargreaves announces the acquisition of Imperial Tankers Limited (“Imperial”) a company engaged in the movement of liquid products, similar to those transported by Hargreaves Bulk Liquid Transport Limited (“HBLT”). Together, the merged businesses will be a top 5 player in the UK chemical tanker sector.
Hargreaves is paying an initial consideration of £5.0 million in cash, to be funded from existing resources. There is also an earnout of up to £2.0 million payable in cash based on the performance of the combined businesses of HBLT and Imperial in the first year following completion. Payment of the full consideration will result in a PE multiple of 7 times current year earnings. The directors of Hargreaves believe that the acquisition will be immediately earnings enhancing.
Imperial was a MBO from ICI approximately 10 years ago, since when it has grown substantially. Around 80 per cent of its volumes are contracted for periods of between one and five years. Key customers include Terra Nitrogen, UK Bitumen, Petroplus and Koppers. Hargreaves plans to integrate Imperial with HBLT. Both businesses operate in a very attractive sector within transport with a high focus on health and safety leading to higher margins.
In the last financial year, Imperial achieved a profit before tax of £1.35 million on sales of £16.1 million. Warranted net assets at completion are £3.0 million.
Note: Nothing in this announcement should be construed as a profit forecast or be interpreted to mean that the future earnings per share or profits of Hargreaves will necessarily be greater than the historic published earnings per share.
Commenting on the acquisition of Imperial, Hargreaves’ Chief Executive Officer, Gordon Banham said:-
“Imperial is an excellent and well-run chemical tanker business which is also a perfect fit with our own business, HBLT. The integration of the 2 businesses will start immediately and will result in significant synergies and savings. We view the growth potential of the combined chemical tanker operations as very encouraging”.
Enquiries:
Hargreaves Services
0191 373 4485
Gordon Banham, CEO
Peter Dillon, Financial Director
Buchanan Communications
0207 466 5000
Tim Anderson
Brewin Dolphin
0113 244 0130
Andrew Kitchingman
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