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Franchise Brands acquires water pump business WPL Group
7th Oct 2019 09:03
(Sharecast News) - Multi-brand franchisor Franchise Brands acquired a leading water pump business on Monday to complement and expand its Metro Rod drainage and plumbing unit.
Franchise acquired WPL Group and its subsidiaries, Willow Pumps and Willow Drainage, for £4m in cash and £1m through the issue of 1.21m new ordinary shares. The cash element of the payment was satisfied from the group's available cash resources and existing debt facilities.
The acquisition also included a performance-based deferred consideration of up to £7.5m payable over the next five years.
Willow Pumps achieved revenues of £12.4m, underlying earnings of £1.6m and a pre-tax profit of £1.1m during 2018 and Franchise said it had continued to grow strongly in the first half of 2019 - having achieved revenues of £8.4m, an EBITDA of £1m and a profit before tax of £800,000.
Chairman Stephen Hemsley said: "The longer-term aim of the group is to be able to serve our valued commercial customers with a 'water in, waste out' range of drainage, pumps and plumbing-related services on a national basis.
"The acquisition of Willow Pumps, a highly respected business and one of the leaders in the market, which Metro Rod has already worked alongside, provides the optimum way for Metro Rod to enter the specialist pump sector and develop this expertise across our franchise community."
Elsewhere, Franchise Brands said second-half trading had started out "encouragingly", with momentum being maintained in Metro Rod's sales growth, with a year-to-date increase of 15%.
Across the AIM-listed group's B2C brands, it continued to see an improvement in franchisee recruitment, recruiting 54 new franchisees so far in 2019 at ChipsAway, Ovenclean and Barking Mad, with the latter experiencing a "particularly strong" third quarter.
As of 0900 BST, Franchise Brands shares had shot up 11.58% to 92.05p.
Franchise acquired WPL Group and its subsidiaries, Willow Pumps and Willow Drainage, for £4m in cash and £1m through the issue of 1.21m new ordinary shares. The cash element of the payment was satisfied from the group's available cash resources and existing debt facilities.
The acquisition also included a performance-based deferred consideration of up to £7.5m payable over the next five years.
Willow Pumps achieved revenues of £12.4m, underlying earnings of £1.6m and a pre-tax profit of £1.1m during 2018 and Franchise said it had continued to grow strongly in the first half of 2019 - having achieved revenues of £8.4m, an EBITDA of £1m and a profit before tax of £800,000.
Chairman Stephen Hemsley said: "The longer-term aim of the group is to be able to serve our valued commercial customers with a 'water in, waste out' range of drainage, pumps and plumbing-related services on a national basis.
"The acquisition of Willow Pumps, a highly respected business and one of the leaders in the market, which Metro Rod has already worked alongside, provides the optimum way for Metro Rod to enter the specialist pump sector and develop this expertise across our franchise community."
Elsewhere, Franchise Brands said second-half trading had started out "encouragingly", with momentum being maintained in Metro Rod's sales growth, with a year-to-date increase of 15%.
Across the AIM-listed group's B2C brands, it continued to see an improvement in franchisee recruitment, recruiting 54 new franchisees so far in 2019 at ChipsAway, Ovenclean and Barking Mad, with the latter experiencing a "particularly strong" third quarter.
As of 0900 BST, Franchise Brands shares had shot up 11.58% to 92.05p.