Listed structural steel group Severfield has agreed a multimillion-pound deal to acquire a £22m-turnover steel fabrication business.
The Thirsk-headquartered company has entered into an agreement to acquire 100 per cent of the share capital of DAM Structures, based at Carnaby near Bridlington.
A net initial consideration of £12m will be paid, with a further maximum deferred consideration of £7m payable in 2022, together with a performance-based contingent consideration of up to £8m.
DAM Structures recorded audited revenues of £22.3m and a profit before tax of £1.9m for the 12 months to 31 October 2019.
The company's core business involves on-site work with main contractors and ground and demolition contractors, often prior to the stage of project construction at which Severfield would typically become involved. The deal is expected to enable Severfield to establish relationships and contracts at an earlier stage.
The acquisition will also facilitate an immediate increase in the production capacity of DAM Structures, allowing it to realise identified growth opportunities.
Alan Dunsmore, chief executive at Severfield, said: "This is a very exciting, highly complementary acquisition which will help the group continue to deliver on its strategic growth objectives.
"DAM Structures will provide us with access to existing and new customers earlier in the construction process as well as access to new market sectors with strong growth potential including the growing rail electrification sector. DAM Structures has an established client base and proven track record of delivering quality services and will fit in well with the Severfield culture and team.
"We look forward to working with the DAM Structures management team on building new business opportunities together and driving future growth from within the combined group."
The vendors were advised by a team from the Leeds office of Grant Thornton, led by corporate finance director Duncan Morpeth and supported by Jim Whittaker, John Whitney and James Boreman. The firm also provided tax advice led by Douglas Tailby and Josh Smailes.
Martin Frost, corporate partner at law firm Andrew Jackson Solicitors, assisted by commercial property partner Helen Mellors and corporate assistant Liam Hessay, also advised.
Advisers to Severfield included James Fawcett at Gordons (legal), and Will Oxley, Ben Ferguson and Nicholas Breeze from PwC.
Source : https://www.insidermedia.com/news/yorkshire