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Severfield to acquire steelwork business Harry Peers
1st Oct 2019 09:55
(Sharecast News) - Structural steel group Severfield has entered into an agreement to acquire 100% of the share capital of Harry Peers & Co - a full-service structural steelwork business - for a net initial consideration of £18m, payable in cash on completion, it announced on Tuesday.
The London-listed firm said a performance-based deferred consideration was in place, which could increase the purchase price by up to £7m, which would be payable in late 2020.
It explained that the acquisition would "significantly expand and extend" Severfield's current capabilities into "attractive" complementary market sectors - nuclear, process industries and power generation.
Combining the businesses would enhance Severfield's position as the UK's broadest structural steel services group, the board claimed.
For the 12 months ended 30 April, Harry Peers achieved audited revenues of £21.2m and profit before tax of £3.4m, with the value of the gross assets as at 30 April standing at £24m.
The acquisition consideration would be funded by a combination of cash reserves and a term loan, and was expected to be earnings-enhancing in its first full year of operation.
"This acquisition will help Severfield continue to deliver on its strategic objectives," said Severfield chief executive officer Alan Dunsmore.
"Harry Peers's experience in specialist, highly regulated, non-cyclical markets will enhance our future growth plans through expanding the group's capabilities and sector reach.
"We believe Severfield is best placed to help Harry Peers continue its profitable growth trajectory, through increased scale and investment and together with Harry Peers's strong management team we have a real opportunity to develop a broader position within the UK structural steel services market."
The London-listed firm said a performance-based deferred consideration was in place, which could increase the purchase price by up to £7m, which would be payable in late 2020.
It explained that the acquisition would "significantly expand and extend" Severfield's current capabilities into "attractive" complementary market sectors - nuclear, process industries and power generation.
Combining the businesses would enhance Severfield's position as the UK's broadest structural steel services group, the board claimed.
For the 12 months ended 30 April, Harry Peers achieved audited revenues of £21.2m and profit before tax of £3.4m, with the value of the gross assets as at 30 April standing at £24m.
The acquisition consideration would be funded by a combination of cash reserves and a term loan, and was expected to be earnings-enhancing in its first full year of operation.
"This acquisition will help Severfield continue to deliver on its strategic objectives," said Severfield chief executive officer Alan Dunsmore.
"Harry Peers's experience in specialist, highly regulated, non-cyclical markets will enhance our future growth plans through expanding the group's capabilities and sector reach.
"We believe Severfield is best placed to help Harry Peers continue its profitable growth trajectory, through increased scale and investment and together with Harry Peers's strong management team we have a real opportunity to develop a broader position within the UK structural steel services market."