Polypipe Group has announced the acquisition of ventilation firm Nuaire for £145m, as it continues to target the low-carbon market.
According to Construction News, the acquisition will be financed using existing cash and new debt. Polypipe expects to complete the deal this month.
In an update to the City this morning, Polypipe said the acquisition was part of its strategy to provide products that “benefit from environmental legislation aimed at reducing the UK’s carbon emissions”.
The company’s share price was trading at more than 7 per cent up by midday.
Polypipe chief executive David Hall said: “We have long been an admirer of Nuaire and this acquisition provides a perfect fit for us.
“Nuaire expands considerably our product platform and market reach within the growing ventilation sector, which, like other parts of our business, is being positively impacted by environmental legislative change.
“Nuaire will continue to operate as an independent division, as we leverage the capabilities of the combined group to drive growth, bringing more choice to our broader customer base.”
Nuaire chief executive Mark Huxtable said the two companies shared a similar culture and philosophy and would be better placed to “tap into the excellent prospects for the sector” following the deal.
Nuaire is based in Caerphilly, South Wales, and its customers are mostly contractors and building consultants. The company has about 450 full-time employees.
Explaining the rationale behind the acquisition, Polypipe said Nuaire provided a “market-leading position in the UK commercial ventilation sector where Polypipe is not present”.
It added: “It is anticipated that the senior management of Nuaire will remain with the combined business.”
Under the terms of the transaction, Polypipe’s existing £120m term loan will be repaid, and its existing revolving credit facility of £40m will be expanded to £300m.
Nuaire is a UK-based designer, manufacturer and distributor of ventilation systems to the UK commercial, UK residential and international ventilation markets.
Its commercial business provides ventilation systems (with or without heat recovery) and energy-efficient solutions for new-build and refurbishment in the private and public sectors. End users include offices, schools, hospitals, hotels, retail and leisure outlets, and car parks.
Residential end users include housing associations, local authorities, national, regional and local housebuilders, as well as self-builders.
The company’s international activities entail Nuaire Commercial and Residential product portfolios being sold via third-party distributors to the Middle East and mainland Europe, as well as low-temperature axial fans being distributed directly to customers, mostly in Northern Europe.
For the 12 months to 30 June 2015, Nuaire has generated (unaudited) sales of £63.5m (up 18.8 per cent on the previous year) and EBITDA of £12.8m (up 29.4 per cent).
As at 30 September 2014, Nuaire had gross assets amounting to £69.9m.