5 July 2016 – acquisitions
The company has announced two acquisitions, which are expected to be immediately earnings enhancing. UK Dry Risers Limited, a specialist in the installation of dry and wet riser systems, based in Bury, has been acquired for a maximum cash consideration of £2.1m. This is made up of an initial payment of £1.2m, a fixed deferred payment of £50k payable on the first anniversary of completion and a contingent payment of a maximum of £0.86m. Unaudited revenue for the year ended 31 March 2016 was £3.0m and profit before tax £0.7m. Unaudited net assets at 31 March 2016 were £1.4m. Positive working capital balances were £1.6m at completion, including cash balances of £0.8m.
UK Dry Risers Maintenance Limited, a tester, repairer and maintainer of dry and wet riser systems, based in Oldham, has also been acquired for a maximum consideration of £3.5m. This comprises an initial cash payment of £1.8m, five fixed deferred payments of £60k payable on the anniversary of completion and the balance of up to £1.4m in contingent deferred payments over five years, subject to the business achieving stretching and escalating milestone profitability targets in each of those periods. The deferred consideration can be paid in cash or shares at the sole option of Premier Technical Services. Unaudited revenue for the year ended 30 November 2015 was £1.1m and profit before tax £0.4m. Unaudited net assets at the same date were £0.5m. Positive working capital balances were £0.8m at completion, including cash balances of £0.5m.
Both businesses will be integrated into the Electrical Services Division. The acquisitions appear to have been completed on very sensible terms and should drive further value into the business. BUY.