Member Article

Newcastle’s Northern Investors receives £16.38 million for shares in Kerridge Commercial Systems

Newcastle-based Northern Investors Company PLC has announced the realisation of its investment in Kerridge Commercial Systems Limited, which provides integrated business software solutions for the distributive trades, to the incumbent KCS management team backed by private equity funds managed by Accel-KKR.

Northern Investors has received cash proceeds of £16.38 million for its holding of ordinary shares in KCS.

The directors’ valuation of the investment in KCS for the purposes of calculating the unaudited net asset value as at 30 September 2014, disclosed in the half-yearly report for the six months then ended which was published on 11 November 2014, was £14.61 million.

The uplift in Northern Investors’ net assets resulting from the realisation is therefore £1.77 million, equivalent to approximately 20.3 pence per share based on the 8,728,440 shares currently in issue.

Northern Investors may, subject to any warranty claims which may be made by the purchaser, become entitled to receive further proceeds of up to £0.85 million in February 2016, which will be recognised in the financial statements as and when received.

The directors expect to announce Northern Investors’ unaudited net asset value per share as at 31 December 2014 on 11 February 2015.

Pursuant to Northern Investors’ policy, adopted by shareholders in July 2011, of realising its investment portfolio and returning funds to shareholders, the directors now intend to make a further distribution of not less than £18.5 million to shareholders by way of a tender offer.

It is expected that a circular giving details of the tender offer will be published on 27 February 2015 and that the ensuing re-purchase and cancellation of shares will be completed by 31 March 2015.

On completion of the tender offer, assuming full take-up by shareholders, the cumulative amount returned to shareholders since July 2011 by way of tender offers and dividends will be at least £60 million, equivalent to over 100% of the net assets at the commencement of the realisation process.

This compares favourably with the directors’ original estimate in November 2011 that between 60% and 80% of the opening net assets would be returned to shareholders in cash by 31 March 2015, and is within the range of 100% to 115% estimated in the half-yearly report published on 11 November 2014.

The tender offer circular will include an updated estimate of the range of possible outcomes of the realisation process by its expected conclusion in 2017.