Group makes second regional acquisition this year
Manchester-based broker CBG has completed the acquisition of Howgud Limited, and it’s trading subsidiaries, EDN (Insurance Services) Ltd, E Davies (Northern) Ltd and EDN (Financial Services).
CBG will pay a maximum total consideration of £2,325,000, but will pay an initial consideration of £1,200,000 in cash for EDN, with a further deferred consideration totalling a maximum £1,125,000 payable in cash and shares over a two year earn-out period against achievement of targets.
EDN’s operational businesses generated profit before tax of £219,959 on turnover of £1,170,012 in the year to 31 March 2007.
The Oldham-based company is a provider of general insurance broking and financial services. The existing directors of EDN will remain with the enlarged business. The directors believe that significant synergies will be generated by the addition of EDN, both in terms of further development of the group’s offering and also through the cross selling opportunities available from the wider CBG service offering.
Howgud Limited acts only as a holding company. It does not prepare group accounts, and accordingly the following unaudited financial information is given for the combined trading subsidiaries for the year ended 31 March 2007.
The initial consideration of £1,200,000 has been satisfied in cash from the Group’s own cash resources at completion. The vendors will subsequently subscribe for 230,032 new ordinary 4p shares (locked in for a period of 12 months after completion) in CBG amounting to £360,000.
The deferred consideration of a maximum of £1,125,000 is payable in cash and shares in two tranches of £575,000 in April 2009 and £550,000 in April 2010, subject to EDN achieving agreed turnover levels in the two years following completion.
Laurie Turnbull, chairman of CBG Group, said “The acquisition of EDN is our second regional acquisition in 2008 and further consolidates our strong position within the North West market. I believe that real benefits will be derived from consolidating and integrating EDN into CBG, in turn adding value for our shareholders.
“After acquiring EDN we now employ over 180 people across our office network. The Group’s expansion plans remain active both organically and through acquisition.”
