Initial Public Offering - 5 October 2007
For Immediate Release 5 October 2007
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA
CVS Group plc (‘CVS’ or ‘the Company’ or ‘the Group’)
INITIAL PUBLIC OFFERING - £105.7 MILLION FLOTATION ON AIM, RAISING £92.7 MILLION AT 205 PENCE PER SHARE
- CVS, one of the UK’s leading providers of veterinary services, announces its successful Placing to raise £92.7 million for Selling Shareholders and its application for its Ordinary Shares to be admitted to trading on AIM
- Panmure Gordon & Co, the Nominated Adviser and Broker to the issue, has placed 45,205,800 shares (representing 87.7% of the Company’s issued share capital) at 205 pence per share, raising £92.7 million for Selling Shareholders and valuing the whole of CVS at £105.7 million
- The Placing was comfortably over-subscribed, with high quality demand at the Placing Price
- The purpose of the flotation is to raise the public profile of the Group, to help drive new business and to increase awareness of the Group within the veterinary profession. It has also provided an opportunity for Nash Sells Limited Partnership II, a fund managed by Sovereign Capital Partners LLP, to realise its investment after eight years of support
- The Company’s three recently appointed non-executive directors have agreed to buy a total of £100,000 worth of shares at the Placing price
- Dealings are expected to commence on AIM on 10 October 2007 under the ticker symbol ‘CVSG’, ISIN GB00B2863827
- CVS was established in August 1999, with financial backing from funds managed by Sovereign Capital Partners LLP, to acquire and operate veterinary practices which were well established within their local community and had a reputation for high quality service.
- Based in Diss, Norfolk, the Group operates two divisions: the practice division composed of 45 small animal practices and one equine specialist practice (128 individual surgeries throughout the UK) and the diagnostic division made up of three veterinary diagnostic laboratories which provide services to CVS and to third parties.
- The current management team of Simon Innes, Chief Executive since 2004, and Paul Coxon, Finance Director since 2003, has increased sales from £12.8m in 2005 to £39.0m in 2007 (year end 30 June), a compound annual growth rate (‘CAGR’) of 75%. EBITDA has increased from £1.3m to £5.1m over the same period, a CAGR of 98%.
- CVS currently employs 1,214 staff, including 271 vets, as well as using additional locums, and is the largest national consolidator of veterinary practices.
- The provision of central services by the Group enables individual surgeries to focus on the provision of clinical care. The services provided bring cost and revenue synergies to the Group as a whole when compared to operating as individual practices.
- CVS also enjoys further benefits from the increasing scale of the Group including favourable buying terms from suppliers, growing efficiencies across the cost base, and increasing intra-Group referrals.
- The Company strategy recognises that the value of veterinary businesses lies in the quality of their staff and the relationship they enjoy with the existing clients. Support management expertise and other services are therefore provided centrally to all Group practices, relieving them of the administrative burden and enabling local staff to concentrate on clinical care.
- Several factors are currently contributing to a growth in the market for veterinary services in the UK - a growing and ageing pet population, advances in veterinary medical science, changes in the demographic profile of the human population and growth in the pet insurance industry.
On announcing the flotation, Simon Innes, Chief Executive of CVS, said
“I am delighted to announce our flotation on AIM. I believe that CVS has now reached a stage in its development where its strategy for growth, both organically and through acquisition, can be more readily achieved as a quoted company. PLC status will enhance our awareness and reputation in the industry, help drive business and attract potential acquisitions. It has also provided an opportunity for Sovereign Capital to realise its investment after eight very supportive years.”