Acqn/Placing&Open Off-Summary
CRANSWICK PLC
6 September 1999
PROPOSED ACQUISITION OF PETHICK & CO. LIMITED AND AN
ASSOCIATED PROPERTY FOR AN
AGGREGATE CONSIDERATION OF £15.5 MILLION
PLACING AND OPEN OFFER BY
HSBC INVESTMENT BANK PLC
OF 3,520,458 NEW ORDINARY SHARES AT 340P PER SHARE
Cranswick plc ('Cranswick') announces its proposed
acquisition of the entire issued share capital of Pethick
& Co. Limited ('Pethick') and of an associated property
(the 'Associated Property').
* Pethick is a producer of premium quality hams which
the Directors of Cranswick believe will be a valuable
addition to and will complement Cranswick's existing food
business. Pethick's customer base includes some of the
UK's major supermarket retailers. In the year to 31
January 1999, Pethick made sales of £13.8 million, pre-
tax profits of £3.1 million, and, as at 31 January 1999,
had net assets of £1.9 million.
* The maximum consideration for the acquisition of
Pethick and the Associated Property (the 'Acquisition')
will be £15.5 million, with £2.0 million being satisfied
through the issue of 588,236 ordinary shares of 10p each
in the capital of Cranswick ('Ordinary Shares') to
certain Pethick shareholders ('Consideration Shares') and
£13.5 million being satisfied in cash, which is to be
partly financed from the issue of 3,520,458 Ordinary
Shares ('New Ordinary Shares') under a placing and open
offer ('Placing and Open Offer'). The balance of the
cash consideration will be funded though bank facilities.
* Under the share purchase agreement between Cranswick
and Pethick's shareholders (the 'Vendors'), the total
consideration may be reduced depending on the level of
Pethick's pre-tax profit in respect of the period from 1
February 1999 to 4 September 1999, and Pethick's net
assets as at 4 September 1999.
* The Placing and Open Offer is at 340p per share,
representing a 4.9 per cent. discount to the closing
middle-market price of an Ordinary Share on 3 September
1999 and will raise £11.2 million, net of expenses.
Qualifying Shareholders will be invited to subscribe for
New Ordinary Shares on the basis of 6 New Ordinary Shares
for every 25 existing Ordinary Shares held on 1 September
1999.
* The Acquisition is expected to be immediately
earnings enhancing before the amortisation of goodwill,
and is conditional, inter alia, on the approval of
Cranswick shareholders.
* Following the completion of the Acquisition, David
Pethick will be joining the board of Cranswick. David
Pethick and the other Pethick directors will be employed
under new service contracts with Pethick for a minimum
term of three years.
* Dealings in the New Ordinary Shares are expected to
commence on 6 October 1999.
* The sponsor, broker and underwriter to Cranswick is
HSBC Investment Bank plc, which has fully underwritten
the Placing and Open Offer.
Martin Davey, Chief Executive, said:
'The acquisition of Pethick represents a significant
opportunity for Cranswick and continues our strategy of
making earnings enhancing acquisitions. We welcome David
Pethick and his co-directors and colleagues to the Group
and look forward to the continuing progress of the
enlarged Cranswick Group.'
Enquiries:
Cranswick plc 01377 - 270 649
Martin Davey, Chief Executive
John Lindop, Finance Director
HSBC Investment Bank plc 0171 - 336 9000
John Mellett, HSBC Growth Companies
John Hannaford, HSBC Securities
Paternoster Partnership 0171 - 336 7776
Paul Quade
This announcement does not constitute an offer to sell or
to subscribe for, or the solicitation of an offer to buy
or to subscribe for, ordinary shares in Cranswick plc and
is not for distribution in or into the United States,
Canada, Australia, Japan, the Republic of Ireland or
South Africa or their respective territories or
possessions. Any purchase of or application for Ordinary
Shares in Cranswick plc should only be made on the basis
of information contained in the circular to shareholders
comprising a prospectus issued in connection with the
Placing and Open Offer.
This announcement, for which the directors of Cranswick
plc are solely responsible, has been approved by HSBC
Investment Bank plc, which is regulated in the United
Kingdom by the Securities and Futures Authority Limited,
solely for the purposes of section 57 of the Financial
Services Act 1986.
HSBC Investment Bank plc is acting solely for Cranswick
plc and no-one else in connection with the Acquisition
and the Placing and Open Offer, and will not be
responsible to anyone other than Cranswick plc for
providing the protections afforded to customers nor for
providing advice in relation to the Acquisition and the
Placing and Open Offer.
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