Ultimate Finance Group plc to purchase the whole of the issued share capital of Ashley Commercial Finance Ltd

Ultimate Finance Group plc is to conditionally buy the whole of the issued share capital of Ashley Commercial Finance Ltd.  The investment will be done for a consideration of 4.75 million pounds to be paid via a 3.70 million pound in cash and 1.05 million pound in shares. Other than that, a deferred consideration of ups of 2.70 million pounds may be payable.

Ultimate’s current directors feel that the acquisition of Ashley is considerably earnings accretive, and as well expect considerable cost savings of up to 400,000 pounds, even though they expect that only a proportion of these savings would be attainable in the first year following admission. The acquisition constitutes a reverse takeover under the AIM Rules and would therefore require Shareholder approval.

Ultimate Finance Group plc is an AIM listed firm and is involved in the factoring, invoice discounting and financial solutions provider to the SME sector. However, the deal is still conditional on shareholder approval and its financing will be raised as follows; 2.75 million pounds will be raised through placing at 12p (GBP1.83m net of expenses) and acquisition finance facility entered into, of up to 2 million pounds.

The firm said the acquisition creates an independent national force in growing factoring and invoice discounting market, for which the businesses are highly complementary, serving clients of different typical size. Other than that, the business as well brings major potential synergistic benefits with merits such as access to new clients and introducers, strengthened presence in north-west England and opportunities in new markets.

Ultimate as well expects to gain through joint marketing and cross-selling to respective client bases, client retention through mutual referrals and leveraging Ultimate's wider product range.

Ashley had 2010 operating profit of 0.7 million pounds, a loan book of 4.4 million pounds and net assets of 0.94 million pounds. Its acquisition is expected to be earnings-accretive, with savings up to 0.4 million pounds annually from the second year.

Ultimate Finance Group plc is a United Kingdom-based company whose principal activities of are the provision of factoring, invoice discounting and trade finance services. The Company's subsidiaries include Ultimate Finance Limited, Ultimate Factors Limited, Ultimate Asset Finance Limited and Ultimate Cash Flow Limited. In March 2010, the Company established the subsidiary, Ultimate Trade Finance Limited.

12 Oct 2010.