Debts.co.uk moves on Scotland with £500,000 AFS move

INSOLVENCY firm Debts.co.uk has made its first foray into Scotland after it snapped up Aberdeen-based Adie Financial Solutions (AFS) in a cash plus shares deal.

Debts chief executive Paul Carter said the group was "in talks" to open a second office in Glasgow.

The total purchase price of 500,000 comprised 400,000 in cash with the balance in shares of the enlarged group.

Carter said the decision to buy was because it was a natural strategic move for the company. "We already generate inquiries from Scotland," he explained.

"It's a marketplace that does not have as much competition as the rest of the UK."

AFS, which employs 21 staff offering services to both individual and corporate clients, is the largest insolvency company north of the Central Belt.

Last year, it achieved sales of almost 873,000, resulting in EBITDA of some 234,000.

Director Alan Adie, who owns AFS, said he was "pleased" with the sale.

"I decided to sell because I need to continue to grow which I could only do with support," he told The Scotsman.

"I am delighted to have the support and financial strength of Debts.co.uk to do that."

AFS will continue to trade under its name in the short term, although Carter said they will be potentially looking at Debts branding or an associate brand.

Debts obtained the money for the cash part of the deal by raising 1.63 million through a share placing of 1,553,571 ordinary shares.

Carter said the balance of the money was going to be used as "additional working capital for the Scottish marketplace".

While he would not be drawn on whether another acquisition was on the cards, he said: "I am always on the lookout for possible purchases."

Shares in insolvency companies in England and Wales have been hit in recent months by profit warnings and pressure from banks. Providers have been criticised for some of their selling methods as well as for charging high fees.

Debts.co.uk is the only listed provider not to release a profit warning in recent months.

Last night, its shares closed 4p - or 4 per cent - higher at 102.5p.