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Newcastle firm set for multi-million buy-out

Heating firm Fenhams looks set to be bought by holding company Southern Bear for up to £7.5 million – depending on the company meeting operating targets.

Southern Bear has signed a conditional agreement to buy the Newcastle based family frim and its assets subject to the agreement of shareholders at its AGM on August 28.

In a statement Southern Bear said: “The directors believe Fenhams is a natural fit with the Group’s existing support services business and creates an opportunity to realise operating synergies, in line with our stated acquisition strategy.”

Fenhams was founded in 1981 and employs around 190 staff. It specialises in the installation, servicing and maintenance of central heating systems and also carries out building repairs and maintenance in the private and social housing market. Customers include eaga – which manages the Warm Front scheme on behalf of the Government.

In the eight month period ending November 30, 2007, Fenhams turnover was £8mill and profit before tax was £598,000.

Southern Bear will initially pay £3.75mill in shares and cash with an additional consideration of up £3.75mill  payable depending on the performance of the company. Southern Bear will also pay out further if the company delivers profit before tax of more than £3.9mill between April 1, 2007 and 31 March 2010.