CVS Group acquires YourVets in £12m deal

Veterinary services provider CVS Group confirmed it will acquire sector peer YourVets in a deal worth £12m.

The London-listed company said it had secured new debt facilities with Royal Bank of Scotland to finance the deal, adding it will pay approximately £9.5m of the purchase price, with the remaining £2.5m payable in loan notes bearing a 10% annual interest.

The agreement with RBS, which includes a fixed term loan of £32m, a revolving credit facility of £48m and a £5m overdraft facility, will provide CVS funds to support its investment strategy over the next few years.

"The new borrowing facility provides CVS with the flexibility, at a comfortable level of gearing, to fund the ongoing development of the business across multiple organic growth initiatives together with additional acquisition opportunities," said group chief executive Simon Innes.

Midlands and Essex-focused YourVets reported annual revenue of £9.2m in the year to 31 March 2014, while earnings before interest, tax, depreciation and amortisation were £200,000 and net assets amounted to £2.4m.

For the financial year ending on 31 March this year, the company’s sales are expected to be approximately £10m, with EBITDA forecast to amount to £800,000.

CVS said it will acquire YourVets’s net debt of £2m with the purchase, adding that intangible assets and goodwill of approximately £12.6 are also expected to arise on acquisition.

CVS shares were up 1.50% to 507.50p at 11:50 on Monday.