Myhome in £20m takeover

11/10/2007 Robert Tyerman

Acquisitive household services franchiser Myhome International has agreed to buy car cleaning and repair specialist ChipsAway for up to £20 million.

Headed by expansionist chairman Russell O'Connell, AIM-quoted Myhome is to pay an initial £16 million in cash and loan notes for Edwin Investments, which operates as ChipsAway, with a further £4 million payable on performance. Kingston upon Thames-based Myhome joined AIM from the PLUS market in December and the deal is expected to turn the group into one of the largest franchise operators in the UK, with 12 franchise brands covering more than 800 franchise territories and 1,000 vehicles in the UK, and international representation in 14 countries.

Fast-growing Myhome, which made £733,000 pre-tax last year on £13 million turnover and £742,000 pre-tax in the latest half-year on £17 million, says adding ChipsAway, which made an interim £558,000 on £2.9 million turnover, will create a group with prospective revenues of more than £80 million. ChipsAway chairman Roger Wild and managing director Steve Bignell are staying on after a three-month negotiation and preparation period confirmed a management rapport between the two companies.

Myhome, which is advised by Noble & Co, is funding the acquisition by raising £6.7 million through a share placing at 72p and an £8 million banking facility negotiated with Lloyds TSB at the height of the recent credit crunch. Existing investors Nigel Wray and Stephen Hemsley are contributing a further £1.4 million by exercising warrants at 40p a share.

That compares with Myhome's current price of 84.5p, up 0.5p this morning to value the company at £43 million. Recommended on PLUS (then Ofex) by Growth Company Investor at 16p two years ago, the shares hit 106p last June.

Long-term progress should be maintained.

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