1pm buys Bell Finance for £3.4m

AIM-listed 1pm has acquired Bell Finance Limited - a specialist provider of funding for business-critical equipment - for £3.4m.

The company, which provides finance facilities to the SME sector, will pay £2.3m in cash at completion, including £300,000 placed in escrow for up to six months. It will pay a further £300,000 of deferred cash over three years and an earn-out of £800,000, comprising £600,000 worth of 1pm shares at 66.7p each and £200,000 in cash, conditional on the achievement of trading forecasts over the three-year period following completion.

Bell Finance is originating approximately £600,000 of new business a year, the majority of which it funds on its own balance sheet, with approximately 15% of deals brokered-on.

It is FCA registered with a current loan book comprising over 400 live agreements amounting to £10.3m of receivables, including £2.3m of unearned interest, i.e. future revenue.

For its financial year ended 30 November 2016, the company's unaudited results included revenue of £1.7m, profit before tax and dividends of £400,000 and net assets of £1.1m.

1pm said it plans to merge the operations of Bell into those of its existing subsidiary Bradgate, which was acquired in March 2016.

Chief executive officer Ian Smith said: "We are delighted to build on the recently announced acquisition in our Loans Division, by completing this acquisition for our Asset Finance Division.

"This latest transaction demonstrates our ongoing commitment to delivering on our strategic objectives of building scale and maintaining our funding and broking capabilities. The acquisition of Bell and its merger into Bradgate creates a substantial business for the funding of hard assets required by many SME sectors and establishes a platform for further growth."

At 1100, BST the shares were up 3.2% to 60.40p.