21 May 2024
Bosses say the deal will enable them to focus on further acquisition deals in Australia.
Allister Webb
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Image © igorkol_ter / Adobe Stock
The CVS Group has announced plans to divest its operations in the Netherlands and the Republic of Ireland for €2.
Officials say the deal, which is expected to be completed early next month, will enable the company to focus on its plans for continuing expansion into the Australian market.
The move was confirmed in a group statement to the London Stock Exchange today (21 May), following a review of its Dutch and Irish businesses.
The group said operations in the two countries made a £6.8 million pre-tax loss in the year to the end of June 2023, including a £2.3 million exceptional write-off, and a similar loss of £6 million is forecast for the current year.
An adjusted EBITDA loss of £0.2 million was also reported for last year, with a £2 million loss currently anticipated for the year to the end of June 2024.
CVS chief executive Richard Fairman said: “Our Netherlands and Ireland practices no longer fit with our strategy of focusing on growth in the UK and Australian markets.
“We have exciting plans to expand in Australia and this disposal will free up working capital and management capacity to support our continued expansion.”
The company’s latest half-year results, published in February, revealed it had already invested more than £50 million on the acquisition of 15 Australian practices.
Bosses have indicated that they expect further acquisitions to take place in the coming months, with their operations focusing on major cities including Melbourne, Sydney, Brisbane and Perth.
Earlier this month, the group also announced the launch of a new secondment scheme, which will offer the opportunity for CVS staff to switch roles between the UK and Australia for a period of up to two years.
The Dutch and Irish operations are being acquired by Global Veterinary Excellence Limited, a company owned by a former CVS director, James Cahill.
The CVS statement said Mr Cahill had served the group for six years and worked in the sector for more than three decades.
It also confirmed that CVS was providing an unsecured £600,000 loan as part of the divestment agreement and the group was satisfied that the deal was fair and reasonable for shareholders following external advice.
Contracts for the sale have been exchanged and the group said it expected the agreement to be formally completed within the next two weeks.
Mr Fairman added: “We are delighted to have found a solution that enables our former colleagues to continue to deliver high quality veterinary care in the Netherlands and Republic of Ireland, and wish James and Global Veterinary Excellence Limited well as an independent business.”
CVS declined to confirm precisely how many practices were affected by the deal, although its website states the group has 27 sites in the Netherlands, plus 4 in Ireland.
