Acal plans to sell IT parts business to MBO team

ACAL, the international advanced technology solutions provider, is planning to sell its Warrington-based UK Parts business to its management team for an initial £2m.

The listed company said the sale of the £22.7m turnover unit, which made a loss of £500,000 in the year to the end of March, will allow it to focus resources in other areas.

The UK parts business supplies a full range of new and refurbished computer parts to IT maintenance companies and provides logistics support including planning, supply, returns and repairs.

Acal said it has faced difficult trading conditions, is loss making, capital intensive and non-core to the rest of its activities.

The deal is subject to shareholder approval and dependent on completion of MBO team’s funding arrangements.

The company said: “The disposal reflects Acal’s continued strategy of building a value-add specialist supplier in the electronics sector. By disposing of this non-core and capital intensive business, the group will be able to focus its resources on enhancing the value of its core electronics division.”

If the deal goes ahead, initial gross consideration will be £2m on a debt free basis, before transaction costs. If the siness is subsequently sold, Acal will receive 25% of any incremental consideration over £2m up to a maximum additional consideration of £9m.

The Disposal will involve the sale of the company’s subsidiary Acal Supply Chain to JCCO 313 Ltd, a company established by the ASC management team,  led by managing director Robert Hall, finance director Mark Hesketh and sales director Jonathan King.
 
Nick Jefferies, group chief executive of Acal said: “”The proposed disposal of the UK Parts business from our Supply Chain division is a further step in our stated strategy of focusing on the specialist electronics market and provides additional resources to invest in this area. We wish the ASC management team every success in the future.”

Brian Higgins of Manchester corporate finance boutique Rickitt Mitchell advised the management team. Lawyers Caroline Litchfield and Charlotte Round, of Brabners Chaffe Street also acted on the deal.

Centric Commercial Finance is providing £4.75m to fund the acquisition and growth of the business.