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COLG to purchase Milton Homes
Posted on Friday, 11 August 2017 13:48
UK firm City Of London Group (COLG) has agreed to acquire UK residential home reversion company Milton Homes from from DV4, a fund advised by Delancey Real Estate Asset Management, for about GBP 20.20 million in a reverse takeover.
The consideration comprises GBP 13.20 million in shares and GBP 7.00 million in cash.
Founded in 2004, Milton Homes arranges, administers and provides home reversion plans.
The business merged with Retirement Plus, which also operates in the equity release home reversion market, in 2007.
Commenting on the acquisition, chairman of the buyer, Paul Milner, said: "Building on the potential that exists within Credit Asset Management Limited (CAML), Milton Homes will enable the Group to develop a broad based financing business and moreover the additional balance sheet strength will give access to a wider range of funding lines.”
Peel Hunt and PR Office have both been hired to advise the buyer on the deal, which is expected to close by 31st December 2017.
The deal is subject to the green light from shareholders and the Financial Conduct Authority.
In a separate announcement, COLG unveiled a GBP 7.00 million cash call and a GBP 4.00 million rights issue in order to finance the concurrent acquisition.
Following completion of the transactions, COLG proposes to change its status from an investing to a trading company.
The London-listed acquiror is a closed-ended investment company, which has pledged significant seed funds to CAML, a provider of asset backed finance for the small and medium-sized enterprises sector and commercial loans to professional practice firms.
COLG generated revenue of GBP 2.57 million in the 12 months ended 31st March 2017, a slight increase on GBP 2.53 million in the previous year.
Net loss for the period totalled GBP 1.19 million, narrowed from a loss of GBP 6.76 million in FY 2016.
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