Secured Loans Bits and Bobs
Is see from this morning’s stock market announcements that debts.co.uk has been on the acquisition trail. Debts.co.uk PLC (DETS), who only listed in May, has paid £330,000 for an IVA specialist called Neville Eckley and Co.
To quote from the stock market announcement “Neville Eckley & Co operates out of four offices in the South East with some 18
employees, including one Insolvency Practitioner, and offers a range of services to both individual and corporate clients including IVAs and Company Voluntary Arrangements. In the year to 31 December 2005, Neville Eckley & Co had sales of £769,000 and EBITDA of £122,000. Based on the audited balance sheet as at 31 December 2005, the net assets acquired as part of the acquisition were £100,000.”
The deal also includes a deferred payment of £30,000 payable in shares 18 months after completion and is presumably based on performance.
Now, I might not be the smartest cookie in the world, but, on the surface of it, this strikes me as a fairly good deal. The purchase and shift in assets means an intangible of £220,000 is moved onto the balance sheet and with an EBITDA of £122,000, this should mean a return on investment inside two years - how many acquiring companies dream of that?
In another development, it seems a tongue in cheek prediction I made is about to come true. It is rumoured that Paragon and Morgan Stanley owned Advantage have entered into a deal to provide second charge mortgage products to the sub-prime market. The range is being kept under wraps at the moment, but is being officially launched next Thursday.
Nicola Severn, marketing manager at Paragon group, said it made sense to utilise both companies’ strengths.
She said: “The range is launching in a couple of weeks’ time. It is an opportunity to expand the range to our brokers. We will earn a fee from the arrangement.”
From only getting bought by Morgan Stanley in December last year - Advantage have certainly made rapid progress.
