Premier buys sprinkler firm in £2.5m deal
Fire safety business strengthened
SPECIALIST SERVICES provider Premier Technical Services Group (PTSG) is to extend its fire safety business with the acquisition of UK Sprinklers for up to £2.5m.
Castleford-based PTSG, which recently extended its credit facility to £12m in order to fund acquisitions, said UK Sprinklers is a specialist in the installation and maintenance of sprinkler systems.
UK Sprinklers made an annual revenue of £3.5m last year and pre-tax profits of £800,000.
The firm will be integrated into PTSG’s Fire Solutions business. Mike Charlton and Steven Griffiths of UK Sprinklers will remain with the group and will work with PTSG’s management team to expand the acquired business.
Paul Teasdale, CEO of PTSG, said: “We warmly welcome UKS to the PTSG Group. The business is well established and respected in the UK and their addition to the group expands our service offering in our Fire Solutions business.
“We look forward to working with Mike and Steven and their colleagues on growing the business and expanding the group’s activities in these key areas.”
UK Sprinklers has been acquired for a total consideration of up to £2.5m, comprising an initial cash payment of £1.3m, two fixed deferred cash payments of £100,000 payable on the first and second anniversaries of completion and a contingent payment of £1.0m payable over three 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 PTSG.
In July, PTSG extended its banking facility to give it headroom to fund further acquisitions.
It extended its banking facilities with HSBC to increase its £10m revolving credit facility to £12m and extended its overdraft from £4m to £8m.
Chairman John Foley said the new facilities provide the group with sufficient levels of headroom to grow both organically and through carefully selected acquisitions.
This latest acquisition follows the acquisition of Brooke Edgley (BEST) in July which involved an initial cash consideration of £14m which was entirely financed from the proceeds of a £15m placing of new ordinary shares to investors.
PTSG said a deferred consideration of £6m for BEST will also be payable over the next three years in equal instalments.
Mr Foley said the acquisition of the Manchester-based lightning protection and steeplejack company has substantially increased the scale of the group.
PTSG said the rationale behind the deal was BEST’s complementary geographical coverage to its existing operations. The acquisition added scale to PTSG’s lightning protection, test and inspection and steeplejack services.
HSBC has been PTSG’s bankers since the group’s formation in 2007. The expiry date of its latest revolving credit facility remains unchanged at September 2020.