Saturday, 17 January 2009

Tribal buys Newchurch

(By Richard Holway) Yesterday, Tribal announce the acquisition of Newchurch Limited for a total consideration of up to £10.5m.

Newchurch is a consultancy providing strategic advice to healthcare organisations at a senior level in both the public and private sectors working with the Department of Health, Strategic Health Authorities and Primary Care Trusts, as well as a number of private providers of healthcare services.

Newchurch had an operating profit of £1.11m on turnover of £3.40m in year to 31st Dec 08 and had gross assets at that date of £1.90m. As far as I can see, the consideration is not performance related – but is dependent on various audit, tax losses, cash and other stuff being verified. So it’s a pretty tasty c3x revenue valuation. It’s being paid in a combination of mainly cash and loan notes (c£7.75m) and the rest in shares.

I declare an interest here in that I’ve known Kingsley Manning – Newchurch’s MD – for 25 years. He was the NED at Wootton Jeffreys when I was CEO back in the mid 1980s. We parted company in 1986 - Kingsley to form Newchurch and me to form Richard Holway Ltd. Kingsley will remain with the business and will join the senior executive of Tribal’s health business.

After 23 years building the Newchurch business, it’s an excellent valuation and if I was Kingsley, I’d be relieved that I’d got it away for mainly cash – given the current climate. Just take care which banks you use to stash the loot.

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