SIG PLC Acquisition of Miers Construction Products Limited (5252T)
July 25 2022 - 2:00AM
UK Regulatory
TIDMSHI
RNS Number : 5252T
SIG PLC
25 July 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS
(SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
LEI: 213800VDC1BKJEZ8PV53 25 July 2022
SIG plc
( the "Company" or "SIG")
Acquisition of Miers Construction Products Limited
SIG, a leading supplier of specialist insulation and sustainable
building products to customers across Europe, announces that, on 22
July 2022, it acquired the entire issued share capital of Miers
Construction Products Limited ("MCP") for an initial cash
consideration of GBP28m on a debt-free and cash-free basis (the
"Acquisition"). A further contingent cash payment of up to GBP6.7m
will be payable, subject to the performance of the business during
the period ending on 31 December 2023 , together with a deferred
cash payment of GBP1.8m, payable in 24 months. The consideration
will be funded from the Company's existing facilities.
Transaction Highlights
-- Acquisition of one of the UK's leading suppliers of
specialist construction materials, broadening SIG's UK offering in
high-performance construction accessories and fixings
-- Strong strategic fit with SIG's proven business model of
entrepreneurial teams, delivering superior service through deep
supplier partnerships and specialist expertise
-- Strengthens existing relationships with key end-users,
serving complementary customer and supplier groups across a number
of key sectors including Infrastructure and Private New
Residential
-- Significant growth opportunities across the combined
business, driven by SIG's national supply network and extensive
product range together with MCP's strong global supply chain and
supplier agreements
-- MCP was acquired by the Company from two founding
shareholders and four members of MCP's management team. The
existing management team, which has delivered MCP's strong sales
growth of c.20% CAGR in recent years, are remaining with the
business. MCP will continue to trade under its existing brand
Financial Highlights
-- Total potential consideration of GBP36.5 million(1) on a
cash-free and debt-free basis represents a multiple equivalent to
7.1x MCP's LTM Adjusted EBITDA(2) . Fixed consideration of GBP29.8m
represents a multiple equivalent to 5.8x MCP's LTM Adjusted
EBITDA(2)
-- The Acquisition is expected to be immediately accretive to
SIG's underlying earnings per share as well as to the Company's
operating margins. MCP generates c.9%(3) operating margin
-- ROIC is expected to exceed SIG's WACC in the first full year of ownership
Commenting on the Acquisition, Steve Francis, Chief Executive
Officer of SIG, said:
"We are delighted to announce the acquisition of MCP, which
demonstrates delivery of SIG's Group strategy to grow both
organically and through carefully targeted value-enhancing
acquisitions. MCP is a highly attractive specialist business with a
strong brand, a great reputation for quality service, and technical
sector specialism and expertise. These key elements have created a
business that has the ability to grow sustainably ahead of the
market. MCP illustrates the opportunities to accelerate through
acquisition our path to 5% margins in the medium term. We welcome
MCP's knowledgeable and committed management team and employees to
SIG and look forward to working with them."
MCP Overview
Established in 2010, MCP is a leading provider of specialist
construction products to specialist sub-contractors, builders and
main contractors. MCP has a proven track record of delivering
growth ahead of the underlying UK construction market. Despite the
disruption caused to both operations and the market by Covid-19,
MCP delivered revenue CAGR of c.20% from 2019 to 2021 (GBP32.3m in
2019 to GBP46.7m in 2021).(4)
For the year ended 30 September 2021, MCP reported revenue of
GBP46.7m and operating profit of GBP4.4m. As at 30 September 2021,
MCP had gross assets of GBP23.5m(4) . The business has continued to
perform strongly in the current year, with (unaudited) revenue of
GBP55.5 million and adjusted EBITDA(2) of GBP5.1m for the 12 month
period to 31 May 2022.
Notes:
1. To be adjusted via customary closing mechanism in due course.
2. Based on unaudited Management Accounts for the year to 31 May
2022. Adjusted EBITDA is operating profit after adjusting items and
amortisation/depreciation and excludes the impact of any
synergies.
3. Operating profit margin per audited statutory accounts to 30 September 2021.
4. Audited statutory accounts to 30 September.
SIG plc +44 (0) 114 285 6300
Steve Francis Chief Executive Officer
Ian Ashton Chief Financial Officer
FTI Consulting +44 (0) 20 3727 1340
Richard Mountain
Peel Hunt LLP - Joint broker to SIG +44 (0) 20 7418 8900
Mike Bell / Charles Batten
Investec Bank plc - Joint broker to SIG +44 (0) 20 7597 5970
Bruce Garrow / David Anderson
The person responsible for arranging the release of this
announcement on behalf of the Company is Andrew Watkins, Group
General Counsel & Company Secretary.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQKZGZNVDFGZZM
(END) Dow Jones Newswires
July 25, 2022 02:00 ET (06:00 GMT)
Sig (LSE:SHI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sig (LSE:SHI)
Historical Stock Chart
From Jul 2023 to Jul 2024