Acquisition of Overseas Konstellation Company S.A.
On 18 November 2025 the Group acquired 100% of the voting shares of Overseas Konstellation Company S.A. and its subsidiary Inversiones C2GFC, SL (together "OKC"), a non-listed company based in Spain specialising in the manufacture of polyolefin foam.
Assets acquired and liabilities assumed
The fair value of the identifiable assets and liabilities of OKC as at the date of acquisition were:
Acquired | Fair value adjustment* | Fair value recognised on acquisition | |
|---|---|---|---|
Assets | |||
Property, plant and equipment (PPE) | 5,822 | 2,670 | 8,492 |
Right-of-use assets | 2,763 | – | 2,763 |
Acquired intangibles | – | 13,668 | 13,668 |
Inventories | 1,942 | 413 | 2,355 |
Trade and other receivables | 4,407 | – | 4,407 |
Cash and cash equivalents | 955 | – | 955 |
15,889 | 16,751 | 32,640 | |
Liabilities | |||
Trade payables | (3,640) | – | (3,640) |
Lease liabilities | (2,763) | – | (2,763) |
Provisions | (448) | – | (448) |
| Deferred tax | – | (4,030) | (4,030) |
(6,851) | (4,030) | (10,881) | |
Total identifiable net assets at fair value | 21,759 | ||
Goodwill arising on acquisition | 10,016 | ||
Purchase consideration transferred | 31,775 |
* The fair value valuation technique relies on inputs not in the public domain and is categorised as Level 3 in the hierarchy (for further details on the determination of levels, see "Estimation of fair values" in note 22).
A fair value adjustment was made to PPE to increase the owned property to market value. The acquisition date fair value of the trade receivables amounts to £4,155k. The gross amount of trade receivables is £4,155k and it is expected that the full contractual amounts can be collected.
The inventory was uplifted by £413k to reflect a distributor’s margin on the value of the inventory.
The goodwill of £10,016k comprises the value of expected synergies arising from the acquisition and represents the excess value of consideration over the fair value net assets and intangible assets acquired. Intangible assets were separately recognised relating to the trade name £2,134k, corporate name £227k, know-how £1,153k , order backlog £299k and customer list £9,855k. Further details of key assumptions made in these valuations can be found in note 27(vii).
The deferred tax liability of £4,030k relates to the intangible assets acquired and fair value adjustments on the land and buildings, applied at a flat rate of 25%, that being the prevailing rate of corporation tax in Spain.
From the date of acquisition, OKC contributed £2,047k of revenue and a loss of £618k to profit before tax from continuing operations of the Group. If the combination had taken place at the beginning of the year, OKC would have contributed revenue from continuing operations of £23,365k and profit before tax from continuing operations of £3,418k.
Purchase consideration | £'000 |
|---|---|
Cash paid | 24,361 |
Deferred consideration – to be paid on 30 April 2026 | 3,045 |
Deferred consideration – to be paid on 30 October 2026 | 3,045 |
Contingent consideration | 1,324 |
Total consideration | 31,775 |
The contingent consideration is to be paid in 2027 subject to OKC achieving 2026 EBITDA greater than €5.5m pro-rated from €5.0m with no payment if the EBITDA is below €5.0m. This must be paid within 30 days of the 2026 OKC audit completion. As at the acquisition date, the fair value of the contingent consideration was estimated to be £1,324k (€1,500k). The contingent consideration is classified as other financial liabilities. Management believes there is a high probability of the target being met, based on past performance and the projected five-year plan and have therefore recognised 100% of the contingent consideration as a liability. This has been classified as non-current in the statement of financial position.
Analysis of cash flows on acquisition | £'000 |
|---|---|
Cash paid on acquisition | (24,361) |
Cash acquired with subsidiary | 955 |
Net cash flow on acquisition | (23,406) |
Fees for the transaction amount to £131k and have been expensed to the income statement.