Bear on the hunt for acquisitions
Nov 7 2007 by Andrew Mernin, The Journal
BUILDING services and supplies company Northern Bear could be on the hunt for a number of North-East firms after raising £11m to fund its acquisition policy.
The AIM-listed County Durham group has freed up funds by entering a new arrangement with Yorkshire Bank and has hinted that it is looking to buy more North-East businesses following a busy year of acquisitions.
So far this year the company has spent around £6.8m on three North-East businesses – refurbishment specialist MGM, asbestos removal firm Chirmarn Holdings and construction group Hastie D Burton.
Meanwhile, last August the firm raised around £3.5m to fund acquisitions through a share placing and, in the same month, gave itself the authority to raise a further £3.1m for acquisitions should the need arise.
The news that the company’s coffers have been bolstered by an £11m acquisition fund would suggest that its aggressive growth strategy is set to continue well into 2008.
Finance director David Jay said: “We have agreed a facility of £11m for acquisitions. We are focused on buying businesses in the North-East and we’re very encouraged by the number of opportunities available.”
A statement issued to the market yesterday said: “The balance of the proceeds of the placing in August 2007, together with the additional flexibility provided by the bank facilities, enables the company to further progress its planned corporate strategy.
“This being the acquisition of mature, North-East- based owner managed businesses in the building services and materials sector which demonstrate consistent profitability and positive operating cash flow.”
Northern Bear, which currently owns nine building services companies in the North-East, was launched on the stock market in December 2006.
The group’s share price climbed steadily in its first six months as a public company, jumping from 89p a share in December 2006 to 176p by late July.
Since then the shares have declined and yesterday were trading at 122p a share.
Northern Bear customers include some of the biggest names in the construction industry such as Persimmon, Bellway and Laing O’Rourke, as well as a number of local authorities.
The company now employs around 350 people, which will rise as further acquisitions are completed.
The firm is lead by executive chairman Jon Pith and chief executive Graham Forrest.
See page two for more on Northern Bear.
