LONDON, UK: Michelmersh Brick Holdings (AIM: MBH), the specialist brick manufacturer, has acquired Fabspeed Holdings, a number one brick fabricator and producer of off-site pre-built brick products, for preliminary consideration of £6.25 million.
Frank Hanna, Joint Chief Executive Officer, said: “We are delighted to announce the acquisition of Fabspeed and welcome the team to the Group. Fabspeed is a nice addition to our business, enabling us to create a number one enterprise in each clay and pre-fabricated products.
“With cross promoting and distribution synergies to unlock over the approaching periods, we expect to improve what’s already an earnings accretive deal to ship additional worth for our shareholders as we combine each businesses.”
Fabspeed is a producer of pre-fabricated constructing merchandise with a significant focus on bespoke, complex and specialist products, together with chimneys, arches, canopies and dormers. Fabspeed has a strong and longstanding administration team who will switch with the enterprise following completion. The Business currently operates from three facilities, two in West Yorkshire and one in Oxfordshire, using roughly 89 people and Fabspeed will instantly revenue from Michelmersh’s broader infrastructure and administration support.
Michelmersh Brick Holdings Board believes that the acquisition is one other important step within the technique for Michelmersh to stay Britain’s main specialist brick manufacturer. Combining Fabspeed with Michelmersh’s existing clay product manufacturing business will create a number one mixed group in clay and related pre-fabricated products, together with brick cladding systems and brick clad chimneys and arches.
The enlarged group will have a broader product portfolio with enhanced routes to market, with Fabspeed’s complementary buyer base and distribution channels.
The up-front acquisition price represents a a number of of 5.3x Fabspeed’s 2021 EBITDA. The Board believes that the Acquisition is financially attractive and is in line with Michelmersh’s monetary efficiency standards for value-enhancing acquisitions. The Acquisition will be earnings accretive within the primary full monetary year after completion, being 31 December 2023, and earlier than the supply of any income or cost synergies.
Fabspeed has a historical past of delivering natural income and revenue growth with related strong money conversion and delivered a revenue earlier than tax of £0.6 million for the 12 months ended 31 December 2021. At the identical date, Fabspeed had gross assets of £5.2 million.
The preliminary money consideration of £6.25 million on a cash-free and debt-free basis, which is topic to focus on working capital adjustments, has been paid on completion this morning. The consideration has been satisfied through existing money resources. There is potential for an additional deferred consideration of as much as £2 million, payable in cash, based on achieving future adjusted EBITDA growth targets over the 2 monetary years following completion.