Companies: STBR   

Industrial and support services holding company Southern Bear has agreed to acquire central heating specialist Fenhams.

Provided its shareholders approve, AIM-quoted Southern, chaired by the ubiquitous Jon Pither, will initially pay £3 million cash and issue £750,000 in shares to the owners of Fenhams. Based in Newcastle, Fenhams made around £598,000 pre-tax on £8 million turnover in the eight months to last November. They install and service central heating systems and carry out building repairs and maintenance in the private and social housing markets.

Thereafter, Leamington Spa-based Southern, which has focused on different applications for pipework systems, will pay another £3.75 million in three tranches if certain profit targets are met between now and 2010. Southern will also pay Fenhams’ vendors an extra pound in shares and cash for each pound by which Fenhams’ pre-tax profits exceed £3.9 million for the three years up to March 2010.

At the same time, Southern intends raise £3.13million through a placing at 2p, not underwritten by its broker SVS. The placing will represent 26 per cent of the company’s enlarged share capital and £2 million of the proceeds will go towards the initial cash element of the Fenhams takeover, with Clydesdale Bank lending the other £1 million.

Floated at 3p three years ago, Southern Bear shares hit 4.63p last September, but now stand at 2.5p, valuing the company at £6.9 million.

Save 50% off your first year’s subscription to Growth Company Investor magazine, and gain immediate access to all the recommendations online. Click here.

Southern Bear	AIM	£9.02m	1.50p	-0.12p
Click here for interactive charting
Other company articles:
Southern Bear prowling again			10/10/2008
Southern Bear plans £7.5m takeover			06/08/2008
New home for Pither			03/03/2008
Pick of AIM by James Crux			07/02/2008
Newcomer - Southern Bear			29/11/2006