£3m to buy bear essentials

Aug 31 2007 by Iain Laing, The Journal

BUILDING services and supplies company Northern Bear has won approval to raise more than £3m in the City to fund its acquisition strategy.

The County Durham business held an extraordinary general meeting yesterday where resolutions were passed to allow the placing of 2,415,250 new ordinary shares to raise £3.15m. Some 13,793 shares will also be issued to Northern Bear’s adviser Strand Partners.

The company said earlier this month that it was aiming to continue its strategy of buying mature, North-East owner-managed businesses which could demonstrate consistent profitability and good cash flow.

An application has been made for the new ordinary shares to be admitted to trading on the Aim, and that is expected to happen today.

Newly stock market-listed Northern Bear already owns nine building services companies in the North-East and is now seeking to buy three more.

The basic details of the deals have already been agreed by the County Durham group, and completion of all three is expected by the end of this year.

Northern Bear has said it is confident this year’s acquisitions will be a prelude to even more activity in 2008.

Executive chairman Jon Pither and his team have bought property refurbishment firm MGM, specialist asbestos removal business Chirmarn Holdings and construction company Hastie D Burton in the first six months of 2007.

Northern Bear’s share price has climbed steadily since debuting on AIM last December at 88p – and stood at 142.9p when the markets closed last night.

The company has based its expansion so far on keeping an acquisition’s management team on board, to retain the formula which has already proved successful.

The new £3.15m funds from the share placing will be added to the company’s resources and bank facilities to finance purchases.

Northern Bear now employs about 350 people, a number which will continue to rise as further acquisitions are completed.