Ultimate Finance Group is to acquire Ashley Commercial Finance for £7.45 million.
Ultimate Finance Group has agreed to acquire Ashley Commercial Finance for up to £7.45 million in a reverse takeover deal.
Under the terms of the acquisition an initial payment of £4.75 million will be followed by a deferred performance-related sum of up to £2.7 million.
AIM-listed Ultimate Finance Group is a factoring and invoice discounting provider to SMEs. In the year to June 2010, the Bristol-based company declared an operating profit of £553,000 on a turnover of £6.44 million.
Clive Garston, chairman of Ultimate, says: ‘Our focus remains the achievement of sustained growth and we see this acquisition as an opportunity to build shareholder value while minimising risk and extending our service into new markets. This deal also positions the company well for any market upturn.’
Cheshire-based Ashley provides invoice financing facilities of up to £3 million to UK SME companies. In the year to March 2010, the company declared an operating profit of £690,000 and had net assets of £940,000.
Ultimate has raised £2.75 million to fund the transaction though a share placing and has also entered into an acquisition finance facility with Lloyds Bank for up to £2 million.
Lloyds has agreed to increase funding available to enlarged group to £34 million. The deal is expected to make savings of up to £400,000 annually from the second year after the transaction.