Flooring group rolls out £35m acquisition
Flooring group Headlam has rolled out another deal with the £35.4m acquisition of Surrey-based Domus.
Headlam is a £700m-turnover group made up of 62 wholly-owned businesses in the UK and Europe that each operate under their own trade brand.
Domus makes tiles and engineered flooring, mostly for premium construction projects such as the new US Embassy in London. It has also completed large projects on landmark buildings including Battersea Power Station, Wembley Stadium, Terminals 2 and 5 at London Heathrow Airport.
Steve Wilson, chief executive of Headlam, said: “Domus is a significant addition to Headlam and broadens our overall position in the industry.
“Domus provides us with meaningful product, supplier and customer diversification and expansion into a market segment that offers higher levels of profitability and additional growth opportunities.”
Domus’s most recent published accounts, for 2016, showed pre-tax profits of £2.9m on revenues of £29.7m.
Its 150 staff will join the Coleshill-headquartered group but will continue to operate as a distinct business with its existing brand and led by the current management team.
Headlam is paying an initial £29.4m to Alcuin Capital Partners LLP and the senior management of Domus, with a further three staged payments based on its performance up to 2020.
Headlam has also updated the market on weaker trading since the summer. The four months to October delivered revenue growth of 1.5% – compared to 4.0% for the first half of 2017 – which masked declining like-for-like sales in the UK.
Despite the recent market weakness, which the group anticipates will result in “revenue growth for the year being marginally lower than planned”, a focus on margins and costs has meant it still expects pre-tax profits to be in line with market expectations.
Wilson added: “We are pleased with our performance despite the weaker backdrop. Our performance underlines our comparative robustness due to our market position, scale and ongoing efficiency initiatives.
“While weaker markets could continue to subdue overall revenue growth, we believe we can continue to enhance our margins and deliver higher levels of profitability going forward.”
Clearwater International advised Domus on the transaction. The team consisted of partners Jon Hustler, Rob Britton and Constantine Biller, with support from associate Daniel Hart.
