Terms of £23m takeover deal secured by transport group

Terms have been reached for the acquisition of transport group Rotala, which values the company at £23.5m.

Simon Dunn (CEO), Bob Dunn (MD North West) and John Gunn (non-executive director) already owned 41.2 % of Rotala’s share capital and are now set to purchase the rest at 63.5 pence per share.

The new business, Rotala Group Ltd (RGL) is looking to invest to support Tividale-headquartered Rotala’s growth potential as a private company, alongside providing an attractive cash return to Rotala shareholders.

It will be controlled by the trio as well as the spouses of Simon and Robert Dunn and Wengen Pension Plan – a personal pension plan operated by Wengen for and on behalf of John Gunn.

RGL says it believes Rotala’s AIM quotation no longer represents good value for Rotala and its shareholders, as it provides limited share price growth alongside access to equity capital. The current business also incurs material costs and carries a regulatory burden.

With this lack of liquidity in shares, RGL directors see a desire from shareholders to make an exit from their investment, which has a restriction on growth opportunities.

A committee of independent directors comprising Graham Spooner (non-executive deputy chair and senior independent director), Graham Peacock (independent non-executive director) and Kim Taylor (group finance director) have recommended the offer to shareholders and secured the terms and conditions.

On its initial approach on September 19, the directors’ offer valued Rotala at £19.7m and went on to secure two extensions to the deadline from the independent directors to continue discussions.

Simon Dunn, director of RGL said: “We are excited about the opportunity for Rotala as a private company, without the regulatory and cost burdens associated with an AIM quotation, which will allow us to operate in a more agile way. We believe that the Acquisition also provides a much-needed liquidity event for Rotala Shareholders.”

Graham Spooner, deputy chair and senior independent director of Rotala, said: “The Rotala Independent Directors are pleased to recommend RGL’s offer of 63.5 pence in cash for each Rotala Share which represents a significant premium to both the Rotala Share price before commencement of the Offer Period and the Tender Offer price per share.”

The Rotala independent directors have been so by Shore Capital as to the financial terms of the acquisition, whilst RGL has been advised by KPMG.