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Vulcan Industries Plc - Heads of Terms for the Acquisition of Aftech

·3-min read

02 November 2021

Vulcan Industries plc

(“Vulcan” or the “Company”)

Heads of Terms for the Acquisition of Aftech

Vulcan Industries plc (AQSE: VULC) is pleased to announce that it has signed Heads of Terms to acquire the entire share capital of Aftech Ltd (“Aftech”) and its dormant parent company (together the “Aftech Group”) from Unity Global - FZCO (the “Vendor” or “Unity Group”).

Acquisition rationale

Aftech is a sheet metal fabrication company specialising in laser cutting, bending and forming. Aftech complements the existing fabrication businesses within the Group (M&G Olympic Products Limited (“M&G”) and Romar Process Engineering Limited), by introducing additional capacity, capabilities and skills.

In advance of completion, M&G has placed orders with Aftech, demonstrating how Aftech will further enhance our Group’s product offering in the sector leading to enhanced efficiencies across the Group.

Aftech Group

At completion, the Aftech Group is expected to have unaudited net assets of approximately

£780,000 and unaudited net debt of approximately £90,000. Aftech is expected to report unaudited revenue of £1,000,000 and unaudited normalised EBITDA of £175,000 for the 12-month trading period ending 30 November 2021. The acquisition is expected to be immediately earnings enhancing.

Total Consideration

The total consideration payable is £1,550,000 to be satisfied by the issue of new ordinary shares of £0.0004 each (the “Consideration Shares”). The number of Consideration Shares will be determined by the VWAP calculated for the 15 days prior to completion. In addition, the Company is issuing warrants with an exercise price of £0.03 with an expiry date of 30 June 2023 to the Vendor (the “Vendor Warrants”). The number of Vendor Warrants will be 20% of the number of Consideration Shares.

At the current midmarket price of 1.64p, the Consideration Shares will represent approximately 21.51% of the enlarged share capital of the Company and together with the warrants approximately 24.75% of the fully diluted share capital.

Conditions precedent

The acquisition is conditional upon the completion of transaction documentation and due diligence which are already underway. Further announcements will be made in due course.

Ian Tordoff, Executive Chairman,After a period of restructuring the existing businesses which have been significantly affected by the constraints imposed by the COVID-19 pandemic, we are delighted to be working with Unity Group who have introduced Aftech. Aftech are already showing the benefits we expect them to bring to the Vulcan Group.”

For further information, visit: https://vulcanplc.com

Contacts

Vulcan Industries plc

Via Vox Markets

Ian Tordoff, Chairman

First Sentinel Corporate Finance Ltd (AQSE Corporate Adviser)

+44 7876 888 011

Brian Stockbridge

Gabrielle Cordeiro

Vox Markets (Media and Investor Relations)

vulcan@voxmarkets.co.uk

Kat Perez

+44 7881 622 830

Paul Cornelius

+ 44 7866 384 707

About Vulcan

Vulcan seeks to acquire and consolidate traditional but historically profitable engineering, manufacturing, and industrial SMEs for value and to enhance this value in part through group synergies, but primarily by unlocking growth which is not being achieved as a standalone private company. For more information visit https://www.voxmarkets.co.uk/listings/PLU/VULC

About Unity Global - FZCO

The Vendor is a subsidiary of the Unity Group, a mergers and acquisitions firm that specialise in attracting investment and creating opportunities for small to medium-sized enterprises (“SMEs”) to scale. https://www.unity-group.com/

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