Proposed recommended acquisition of TClarke plc by Regent Acquisitions Limited

TClarke plc ('TClarke'), the Building Services Group, announces that it reached agreement on the terms and conditions of a recommended cash offer by Regent Acquisitions Limited for the entire issued and to be issued share capital of TClarke plc (the 'Acquisition').

The Acquisition attributes a value to TClarke's shares of approximately GBP90.56 million, representing approximately a 28.00 per cent. premium to the Closing Price of 125.00 pence per TClarke Share on 15 April 2024 (being the last Business Day before the commencement of the Offer Period) and implies a multiple of approximately 11.64 times TClarke's earnings per share for the twelve months ended 31 December 2023.

Full details of the Acquisition are set out in the regulatory announcement available on TClarke's website at: www.tclarke.co.uk/investors. Unless otherwise defined, all capitalised terms in this announcement shall have the meanings given to them in the Rule 2.7 announcement published by TClarke on 16 April 2024 in connection with the Acquisition (the '2.7 Announcement')

The Wider Regent Group, which is wholly-owned by Deep Valecha, was established in 1995 and is a leading supplier of gas and metering services to industrial and commercial customers in the UK, across a range of sectors including, leisure, care homes, manufacturing, food production and retail. Regent has long admired TClarke's reputation, heritage and its talented pool of employees, and has closely followed it since it first acquired shares in TClarke in May 2018. The Acquisition follows Regent's strategy to focus on areas of structural growth where it aims to obtain a greater presence in attractive segments such as those operated in by TClarke. Regent is an existing shareholder in TClarke, holding approximately 21.5 per cent. of TClarke's shares.

TClarke remains at the forefront of the building services sector. Innovation and expertise are employed in the design, installation, integration and maintenance of the mechanical and electrical systems and technologies that a 21st century building needs for control, performance and sustainability. TClarke currently operates from nineteen locations serving the whole of the UK and employs a strategy of pursuing organic growth through five core market sectors, including engineering services, technology, infrastructure, residential and hotels, and facilities management.

TClarke's services encompass the full project lifecycle, from initial design and planning through to installation, commissioning, and ongoing maintenance. With a focus on safety, quality, and reliability, TClarke has completed numerous landmark projects, ranging from iconic skyscrapers and mixed-use developments to critical infrastructure upgrades and renovation projects. TClarke's skilled workforce, technical capabilities, and collaborative approach have made it a trusted partner for delivering complex building services solutions.

TClarke recently announced a year of significant achievement in its preliminary financial results for the year ended 31 December 2023. In a very challenging marketplace, revenue increased by 15% to GBP491m (2022: GBP426m), a forward order book at GBP943m and it reported a profit after taxation of GBP6.5 million (2022: GBP8.4 million).

It is proposed that, following the Acquisition completing, Mark Lawrence and the current executive team will continue to lead TClarke. Following the Scheme becoming Effective, Regent does not intend to make any headcount reductions as a result of the Acquisition and does not intend to make any changes to the business and the conditions of employment of the employees and management of TClarke and its subsidiaries as a result of the Acquisition.

The Acquisition remains subject to a number of conditions, including the approval of TClarke shareholders and sanction by the Court. Subject to satisfaction of these conditions, the Acquisition is expected to complete at the end of the second quarter or early in the third quarter of 2024.

Commenting on the Acquisition, Deep Valecha, CEO of Regent, said: 'TClarke is a business we have long admired since we started to invest in 2018. It is well run, has a strong culture helped by a commitment to a well-established apprentice scheme which offers career progression and a high degree of staff loyalty. Given our admiration for TClarke, as part of our plans, we would like TClarke to continue its business in the manner in which it has been conducted. We will support the management team in their ambitions to strengthen the balance sheet, and continue to grow the business.

I am excited by the opportunities this new chapter presents for TClarke to pursue its long-term strategies to drive sustainable growth and innovation and explore new initiatives.'

Commenting on the Acquisition, Iain McCusker, Chairman of TClarke, said: 'After careful consideration and extensive discussions, I am pleased that the TClarke Board have agreed to recommend that our shareholders accept the offer made by Regent.

The Board considers that the terms of the offer are fair and the Acquisition presents an opportunity for TClarke Shareholders to achieve an attractive premium to the current share price and the Consideration represents a premium of approximately 31.1 per cent. to the placing share price of 122 pence per TClarke Shares on 26 July 2023.

I would like to express my gratitude to all stakeholders and for the dedication and hard work of the TClarke plc employees whose contributions have played a pivotal role in our success so far. I am confident that together, with the support of Regent Acquisitions Limited, we will achieve even more in the years ahead.'

Commenting on the Acquisition, Mark Lawrence, Chief Executive of TClarke, said: 'I am pleased to share this exciting news regarding the future of TClarke. In addition to presenting an attractive premium for TClarke Shareholders, this transaction presents tremendous opportunities for the Company to chart its own course as part of a larger group with significant financial strength, flexibility and autonomy as TClarke continues to pursue its long-term strategies that will drive sustainable growth and innovation.

This new chapter in our journey opens doors to explore bold initiatives and opportunities that may not have been feasible in the past. I am delighted that Regent understands and appreciates the strengths of the business and will be supporting our ambitions to further develop the group as we move forward.

The Acquisition will allow us to prioritise initiatives that create lasting value for our customers, employees and stakeholders. Our commitment to excellence, integrity and customer satisfaction remains unwavering.'

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