N Brown is undergoing significant changes with its impending acquisition and plans to delist from AIM, marking a strategic shift for the company.
- The acquisition by a firm owned by non-executive director Joshua Alliance triggers a share price surge exceeding 40 percent.
- N Brown cites a lack of interest in UK small-cap stocks and high listing costs as reasons for the AIM delisting.
- The proposed acquisition values N Brown at approximately £187 million, highlighting a premium over its current market value.
- N Brown faces economic hurdles, including a notable decline in turnover and EBITDA.
N Brown, a retail group known for brands like JD Williams and Simply Be, has announced a pivotal acquisition by a firm owned by Joshua Alliance, a non-executive director. This move accompanies a strategic exit from the Alternative Investment Market (AIM), influenced by diminishing interest in UK small-cap stocks and prohibitive listing costs. Upon the announcement, N Brown’s shares saw a dramatic increase of over 40 percent, underscoring market confidence in this new direction.
The acquisition, expected to conclude in early 2025 subject to shareholder approval, is conducted at a price of 40p per share. This transaction values the company at about £187 million, significantly above its existing market capitalisation of £126 million. This premium valuation reflects strategic optimism towards N Brown’s growth potential under private ownership.
Joshua Alliance has articulated that the move will better position N Brown for long-term growth by providing it with greater access to capital and expertise. “In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets,” he stated, indicating a forward-focused strategy to overcome current challenges and leverage new opportunities.
The backdrop to these developments includes significant economic strains. In the previous fiscal year ending March 2, 2024, N Brown reported a decrease in turnover by 9.8 percent, amounting to £601 million. Concurrently, adjusted EBITDA decreased by 12.5 percent, landing at £47.6 million. These figures underline the economic pressures confronting the company, necessitating robust strategic pivots.
Interim executive chair and CEO, Steve Johnson, reaffirmed commitment to the company’s core customer base, emphasizing the alignment of this new strategic direction with stakeholder interests. The unanimous support of N Brown’s independent directors for the acquisition proposal highlights a strong internal consensus for embarking on this transformative journey.
N Brown’s acquisition and AIM delisting initiative marks a critical shift aimed at unlocking growth potential amidst challenging market conditions.
