Smiths News PLC, the UK based wholesaler of newspapers, magazines and books, has acquired Hedgelane Limited whose principal subsidiary trades as The Consortium for Purchasing and Distribution Limited, a UK specialist distributor of consumable products to the educational market, for an aggregate consideration of £38.0m, equivalent to an enterprise value of £44.1m.
The aggregate consideration comprises £32 million of initial cash consideration to be financed through existing available debt facilities, up to £2 million of deferred consideration payable in cash in January 2013 dependent on certain conditions and to be financed through available existing debt facilities, and up to £4 million of deferred consideration payable in Smiths News PLC shares in January 2014 dependent on certain conditions.
The Consortium is a profitable, cash generative business that is expected to add an additional £64 million sales and £7 million EBITDA to Smiths News PLC on a proforma FY12 basis. The transaction is immediately EPS accretive and will generate returns significantly above the Group’s cost of capital.
UK, Swindon, Wiltshire
