Cosalt sells one business and buys another
COSALT has announced the sale of its school uniform and childrenswear subsidiary Banner as well as another acquisition in its core safety businsess.
The Grimsby-based company provides critical safety equipment for the marine industry including the life raft, life boat, life jacket, fire safety and lifting and inspection sectors.
Today it announced the sale of Banner, based in Seaham, near Sunderland, to IDP (Holdings) for £4.5m.
The deal includes a cash payment of £1.5m which will be used to reduce group borrowings, and a further £3m in loan notes repayable by the end of 2010 and paying interest of 7% a year from May 2009.
As part of the deal, if IDP sells Banner within 18 months, Cosalt will be entitled to 30% of the sale proceeds attributable to shareholders and, if the remaining Seaham property is sold within two years, Cosalt will receive 50% of the sales proceeds.
In the year to October 28, 2007 Banner made an operating profit of £ 1.25m, however trading had deteriorated considerably compared to last year. Gross assets were £ 10.2m.
The group said that the disposal will result in a loss against its carrying value of £4.9m before costs and goodwill impairment.
It has bought Safety At Height Services (SAHS), an Aberdeen-based distribution and servicing business for the offshore oil and gas industry.
It is part of Capital Safety, the world’s leading fall arrest protection equipment manufacturer.
The new business and its employees will transfer to fellow Aberdeen firm Cosalt Lifting & Inspection, formerly known as GTC, which Cosalt bought last October.
Fall arrest harnesses are obligatory when working at heights on oil and gas platforms and new regulations in the UK now require that they are inspected and recertified annually.
Cosalt said that it was a “legislative driven service opportunity which the group fully intends to capitalise”.
Per Jonsson, chief executive of Cosalt, commented: “The disposal of Banner is important in further focusing the group’s earnings and management on our rapidly developing core safety business, in which we are fast becoming a major player. Safety at Height Services is a tactical addition to our recent GTC acquisition, serving the increasingly regulatory-driven, off-shore oil and gas industry.”
The group has been firmly on the acquisition trail in the past year – spending more than £40m on three acquisitions to expand its marine safety business in Europe including the £30m purchase of GTC, the £2m acquisition of SSM and the £10m purchase of Bofort.
The acquisitions have given Cosalt access to most of the large operators in the offshore oil and gas market in the North Sea, the Spanish market and access to ports in Belgium and Italy.
