The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
CEPS announces that it has conditionally agreed to sell its subsidiary, ICA Group Ltd ("ICA"), to a newly formed bidco, CERTANIA ACQUICO-UK LTD (the "Disposal"). The Buyer has been established by Certania Holding GmbH management for the purposes of the acquisition.
The Total Consideration for the Disposal comprises an Upfront Payment and an Earn-Out Payment. The CEPS Consideration is included in the Upfront Payment, with CEPS receiving full consideration for 100 per cent of its equity ownership in ICA upon Completion. CEPS will not participate in the Earn-Out Payment. Accordingly, the CEPS Consideration is fully de-risked upon Completion, as it does not include any contingent or performance-based elements.
The Upfront Payment amounts to an enterprise value of £30.45 million on a debt free cash free basis, which represents approximately 10 times the FY25 unaudited adjusted EBITDA of ICA.
While CEPS' primary focus remains driving the growth and profitability of its underlying subsidiaries, the Board notes that once a subsidiary attains a certain scale, there is a marked increase in enquiries regarding CEPS' potential interest in a sale.
As ICA continues to expand and pursue larger acquisitions, it has become evident that CEPS' capacity to support ICA's growth ambitions will be inherently constrained.
The CEPS Consideration is a total of £14.00 million receivable by the Company comprising £12.74 million due for 100% of CEPS' equity ownership in ICA and £1.27 million for the repayment of outstanding Loan Notes and interest thereon that will be received in full upon approval of the Disposal by shareholders.
The Board believes that the CEPS Consideration represents excellent value for CEPS shareholders. Since CEPS' initial investment in January 2016, CEPS has committed a total of £872,000 into ICA. Taking the Disposal consideration into account, an internal rate of return of approximately 39.8% and a money multiple of approximately 18.8x would be achieved for CEPS.
The CEPS Consideration will provide the Company with the resources with which to pay down the Company's existing external debts, with the remaining funds dedicated to advancing the relevant strategic business drivers that CEPS uses as the foundation for delivering sustained long-term value for shareholders, namely:
I. self-funded bolt-on transactions in existing subsidiaries