Roebuck Food Group buying Moorhead & McGavin, raising £2.5m

The AIM-traded company said the acquisition was valued at £2.23m, with £2.08m payable in cash and £0.15m by the issue of new shares, subject to a completion accounts adjustment mechanism.

It said the transaction remained contingent on the approval of Roebuck shareholders at an extraordinary general meeting scheduled on or before 1 December.

Roebuck said Moorhead & McGavin specialises in supplying pulses, cereals, pasta and rice to the foodservice industry.

In 2022, it recorded revenue of £7.26m, an EBITDA of £0.38m, and net assets totalling £1.65m.

Current chief executive officer Marko Dafereras agreed to remain with the business for at least one year.

“This is an exciting new development for Roebuck, as it implements its strategy of focusing on growing and innovative businesses within the food and agribusiness sector,” said chairman Ted O’Neill.

To fund the acquisition and cover general working capital, Roebuck said it was planning to raise gross proceeds of up to £2.5m by placing new shares.

The placing would be offered to select institutional, professional and other investors for 13.5p each, subject to approval at the extraordinary general meeting and the passing of a resolution authorising the issue of the placing shares.

Roebuck noted that the placing price represented a discount of about 10% to the closing price of 15p on 2 November.

The placing would be conducted through an accelerated bookbuild process.

At 1400 GMT, shares in Roebuck Food Group were flat at 13p.

Reporting by Josh White for Sharecast.com.