LONDON (Alliance News) - Hill & Smith Holdings PLC Thursday said it has inked a deal to acquire W Corbett & Co. (Galvanizing) Ltd in a deal valued at GBP10.5 million on an enterprise value basis.
However, the acquisition requires the approval of competition authorities in the UK because of the size of the two companies. The Competition and Markets Authority is expected to begin a public consultation and review process "shortly", according to Hill & Smith. The process will take about two months, the company expects.
"Whether the acquisition is completed or not, the board is committed to its existing strategy of developing more substantial businesses in each of its chosen sectors through both organic and acquisitive growth," Hill & Smith said in a statement.
According to Hill & Smith, Corbetts operates two galvanizing baths from a modern purpose built facility in Telford. Corbetts uses a fleet of lorries to provide galvanizing services in the UK.
"Hill & Smith believes that the combination of Corbetts with its existing UK galvanizing businesses, principally Joseph Ash Limited, will provide its existing customers with an enhanced customer service and will enable the combined business to broaden its geographical coverage of the UK," the company said in a statement.
Corbetts generated GBP9.6 million worth of sales in 2014, with underlying earnings before interest, tax, depreciation and amortisation of GBP1.5 million. It had net assets of GBP4.1 million at the end of that year.
"The proposed acquisition is expected to be earnings enhancing for 2015 and the board is confident in the prospects of the business thereafter," Hill & Smith said.
Hill & Smith said it is to pay for Corbetts in cash using its existing credit facilities.
Hill & Smith shares were down 0.7% at 685 pence on Thursday afternoon in London.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Hill & Smith (HILS)