Restore acquiring TNT Business Solutions in £88m deal
Restore
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16:55 14/11/24
Office services provider Restore has entered into an agreement to acquire TNT Business Solutions, the records management business of TNT UK, for a total consideration of £88m on a cash and debt free basis, it announced on Monday.
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The AIM-traded company said completion was scheduled for 1 May.
It also announced a placing, conditional on the completion of the acquisition, with institutional investors to raise up to £51.5m before expenses through the issue of up to 10,100,000 new ordinary shares at 510p each.
The placing was significantly oversubscribed, with demand from new and existing institutional shareholders.
Restore said the acquisition would be financed partly from the funds raised by the placing, and partly through new debt facilities with Barclays, Royal Bank of Scotland, Lloyds Bank and Bank of Ireland.
It said the new facilities comprised a £160m revolving credit facility, with an additional £30m accordion facility.
TNT BS operates from five sites in the Midlands and the outskirts of London, including two freehold sites at Swadlincote, Derbyshire and Thurrock, Essex, Restore explained.
It said those sites were operating at close to full capacity utilisation overall.
TNT BS currently employed more than 250 staff, who would transfer to Restore upon completion of the acquisition.
Restore said the acquisition would further strengthen its position in UK records management, particularly with public sector customers who represented the majority of TNT BS' revenues.
It expected that there would be operational and property synergies deriving from the acquisition,, as well as cross-selling opportunities.
Key management was expected to remain with the business, and the acquisition was expected to be earnings-enhancing.
For the 12 months to 31 December, TNT BS recorded EBIT of £7.7m on revenues of £23.2m.
The book value of the assets being acquired, including the two freehold sites, was £23m as at 30 November.
“TNT Business Solutions' records management business is strong operationally with excellent sites and facilities from which it services many major UK public sector institutions and other customers,” said Restore chief executive Charles Skinner.
“We have been tracking this opportunity for some time and we are excited by the additional potential it brings to our business.
“We are also confident of realising synergies from this transaction that will drive increased returns for Restore's shareholders.”