Proposed acquisition

RNS Number : 7702E

Barkby Group PLC (The)

03 March 2020

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

3 March 2020

The Barkby Group PLC

("Barkby" or the "Group")

Proposed acquisition of Cambridge Sound Technologies

Barkby Life Sciences, a division of The Barkby Group PLC, the diversified business group, is pleased to announce that it has signed exclusive, non-binding heads of terms to acquire the intellectual property of Cambridge Sound Technologies and associated parties ("the Acquisition"), a privately-owned developer of advanced sleep technology products. Barkby will subsequently own 75.1% of the acquiring entity, with the remaining shares held by the two founders, who will remain involved in the business.

Cambridge Sound Technologies is the creator of a patented[1] product which uses audio technology to help the brain reset its natural sleeping cycle. Rather than just masking sleep issues, the product targets the underlying principal causes of insomnia and poor sleep patterns that can lead to a range of health problems, including poor mental health, heart disease, diabetes, stroke and weakening of the immune system. In testing, 92% of participants reported a 'significant improvement' to their sleep-related disorders and the average number of hours slept increased 62% over a three-week period from the first night of testing to the last night[2].

Cambridge Sound Technologies is expected to begin commercial production of the product in Q2 2020 with first commercial deliveries expected in Q3 2020. The product has received significant interest from global retailers and distributers.

The consideration for the intellectual property of Cambridge Sound Technologies comprises initial cash consideration of £0.75m and a deferred consideration payable in cash in a number of tranches over 5 years up to £5.25m, conditional upon certain performance criteria having been met. As part of the Acquisition Barkby expects to invest a total of £1.5m of working capital into the acquiring vehicle. Barkby has an option to acquire the remaining 24.9% of the acquiring entity for £5m in cash or Barkby shares prior to 31 December 2021.

The Board expects that the acquisition of Cambridge Sound Technologies will be earnings accretive in FY 2021.

Charles Dickson, Executive Chairman of the Barkby Group, commented:

"Approximately one in three people globally suffer from insomnia and poor sleep patterns and the team at Cambridge Sound Technologies has developed a revolutionary product that tackles the underlying cause of poor sleep. Their focus on research and innovation has created a product that could potentially improve the lives of millions of people suffering from sleep related issues. Barkby is committed to constantly seeking out new opportunities and delivering value to our stakeholders and this Acquisition is firmly aligned with our strategy . I am delighted to add it to our portfolio of businesses"

The proposed Acquisition is subject to, inter alia, the completion of due diligence, documentation and compliance with all regulatory requirements. It is expected that the Acquisition will complete shortly but there is no guarantee as to the timing of the Acquisition or whether it will proceed at all. A further announcement will be made on completion of the Acquisition.

Contacts:

finnCap Ltd (Nomad and Broker)	[phone]
Carl Holmes/Simon Hicks (corporate finance) Tim Redfern/Richard Chambers (ECM)
Camarco (Financial PR)	[phone]
Jennifer Renwick/Jake Thomas

Notes to editors

The Barkby Group PLC is a diversified group of high growth, high quality businesses run by an entrepreneurial and experienced management team. The existing wholly owned businesses within Barkby include; Commercial Property Development, Barkby Life Sciences, Barkby Hospitality (comprising Barkby Pubs and Workshop Coffee) and Centurian Automotive. Barkby's strategy is to accelerate and maximise opportunities within its existing businesses as well as continue to source and invest in cash generative, growth businesses with the ability to disrupt.

 

---

[1] Patent refers to a device that induces and maintains sleep and has been granted in Europe, UK, USA, China, Honk Kong and Japan

[2] Study conducted by CMR for Cambridge Sleep Technologies in April 2016 with 39 participants

 

END

 

 

ACQDBGDXGXGDGGD