Building products group offloads facades division in £4.5m deal

Building and engineering products group Alumasc, which has an operation in Cannock, has sold its facades business in a deal worth £4.5m.

The division, sold to Kilwaughter Minerals, mainly supplies exterior wall insulation (EWI) systems which are used in the refurbishment of hard to heat homes in the public sector.

Alumasc said the market has reduced in size following the cuts in funding provided by the ECO and Green Deal schemes in recent years.

The company said it believes that Kilwaughter, a £34m revenue group based in Northern Ireland and an existing supplier of mineral renders to the EWI industry in the UK, will be “better placed” to develop the business with its greater operational scale and access to raw materials.

The deal comprises initial cash consideration received at completion of £4.5m, and potential deferred consideration of up to £1.5m receivable in a year’s time, based on the performance of the business during that period.

The proceeds of the transaction will be used by Alumasc to support the ongoing investment in its strategic growth initiatives.

In Alumasc’s last full financial year to 30 June 2018, the business generated revenues of £11.1m and made an operating profit contribution to group overheads of £600,000.

The book value of the assets sold, comprising mainly inventories and leasehold improvements at the Glasgow warehouse is anticipated to be around £900,000. The business had been expected to generate a similar financial contribution in the current financial year and said that while the sale will be “modestly dilutive” to Alumasc’s earnings for the year ending 30 June 2019, it will be accretive to group operating margins.

Paul Hooper, chief executive of Alumasc, said: “We are pleased to have sold our Facades business to Kilwaughter. The sale will allow Alumasc to further develop its own portfolio of specialist building product businesses and use the funds to invest in our strategic growth initiatives.”