JCC – the questions and answers

Following this morning’s announcement of the acquisition of JCC by Nationwide, we caught up with JCC to find out more:

What are the details of the transaction?
The boards of directors of JCC and Nationwide have today announced that they have reached agreement on the terms of a recommended cash offer whereby the entire issued and to be issued share capital of JCC will be acquired by Nationwide.

The price for the offer is 118 pence per share in cash, valuing JCC at approximately £13.8 million in total

It is intended that the Offer will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the “Scheme”).

The offer is conditional on approval by 75% of JCC shareholders by value and the majority of those turning out to vote at a court convened meeting of shareholders. There is also going to be a company convened meeting of shareholders to approve matters related to the facilitation of the transaction. The transaction also requires Court approval.

Why is the offer by way of a scheme of arrangement?
In order to increase the certainty that the offer would complete once announced

When is the offer expected to complete?
The exact completion date is subject to availability of court time but it is anticipated that it will complete by 30 September 2015

Is the offer expected to be approved by shareholders?
Holders of more than 75% of the shares in JCC have already agreed to accept the offer, so it is anticipated that it will receive shareholder approval

Why did the directors of JCC recommend the bid?
Whilst the executive directors of JCC had no current plans to sell or exit the business, we were approached by Nationwide via our Non- Executive Chairman and the value of the proposal (in excess of £13 million) and the security and opportunities it presented for our employee team, was felt to be too good not to offer it to our wider shareholder base

Why did Nationwide make an offer for JCC?
This is really a question for Nationwide but we understand that they like JCC for a number of reasons. They believe it to be a very well-run, high quality business and a good fit geographically and the customer centric culture is is shared by both businesses right too – they share our customer-centric approach. In essence, the businesses are highly complementary.

How did this offer come about – did they approach JCC or vice versa?
Nationwide approached JCC

How long have you been talking to Nationwide?
Our conversation regarding this offer was concluded relatively quickly but the wider discussions and due diligence was over a couple of months.

What happens now?
The offer by Nationwide is conditional on acceptance by 75% of our shareholders and approval of the process by the Courts. We are expecting that the acquisition will be completed on or around the 30 September 2015.

Until 30 September JCC will continue to carry on business as before with the same Board of directors and ownership.

Following the completion of the transaction It will very much be business as usual for the time being. The business will continue to trade as Just Car Clinics under the wider Nationwide banner in a similar manner to Howard Basford.

Obviously, NARS are acquiring us because they want to expand and develop the business so I think, over time, there are going to be more opportunities for staff.

Following the completion of the transaction what is happening to the directors and management team?

Barry and Chris will step down from the business when the deal completes which we expect to be around the end of September.

The other members of the central and site management team will remain in their current roles following the acquisition. We have been told that there are no plans to cut jobs and under TUPE the terms and conditions of employment of the JCC team will remain unchanged. Nationwide’s ambitions are to secure further capacity and grow and develop the wider business for the long term, which should present opportunities for the JCC team They have acquired a number of businesses in the last few years and the vast majority of people remain in the team.

Where will the business be run from?
The business will continue to be supported from Goole where the Management and Accounts support are located. Additional central support such as Marketing, Health and Safety and IT are available from Nationwide as required by the business.

Were there any other bidders for the business?
Nothing serious in the recent past

Is this a simple case of the Directors wanting to exit? Why is JCC being sold now?
The executive directors had no desire to exit, but in evaluating the offer they had to consider the wider shareholder base and future opportunities for the team members

Is Nationwide buying this company or are Carlyle buying it? Who is putting up the money?
Nationwide is buying the company, obviously with the knowledge and support of Carlyle

How much do the JCC Directors stand to make with the sale?
Our offer to shareholders is 118p per share. Barry and Chris own approximately 3 million shares plus 1 million share options between them.

Who are the other major shareholders outside the JCC Directors?
The executive directors own approximately 38% of the Company. The Chairman and four other major shareholders, who are unconnected to the directors, own a further 37%. All have given irrevocable undertakings in favour of the offer.

Why did JCC de-list in 2011?
At the time it made more sense for JCC to de-list – the costs of being a listed company outweighed the benefits.

How was the sale price of 118p per share decided upon?
After negotiations Nationwide offered 118p per share and the JCC Directors concluded that this was a fair and reasonable price for the business which had to be recommended to shareholders.

Is the NARS offer to shareholders quite generous given that the last share buy back by JCC was at 45p per share?
The offer which we considered to be fair and reasonable by the JCC Directors

What will happen with JCC after the sale goes through – will you be cutting staff or closing any sites?
We are told that Nationwide have no immediate plans to close sites or reduce the strength of the JCC team. They wish to acquire JCC to add capacity and depth. Obviously, there may be changes in time but their sights are very much set on growth so we see this as an opportunity for JCC staff.