Hill & Smith planning £10.5m acquisition of Telford firm

SHIRLEY-based manufacturer Hill & Smith Holdings is planning to strengthen its offering to the galvanising services market with the £10.5m acquisition of a Telford firm.

Hill & Smith, which supplies infrastructure products and galvanizing services to range of global markets, has signed a conditional sale and purchase agreement  to acquire W Corbett & Co. (Galvanizing).

However, due to the nature of the business, the deal has attracted the interest of the Competition & Markets Authority, which needs to give the transaction its approval. However, that could take up to two months.

Founded by Samuel Corbett in 1860, Corbetts has an established customer base and operates two galvanizing baths from a modern purpose built facility in Telford. Utilizing an extensive fleet of lorries, Corbetts is a provider of galvanizing services to the wider UK market.
 
Hill & Smith said the combination of Corbetts, with its existing UK galvanizing businesses, principally Joseph Ash Ltd, would provide its existing customers with an enhanced service and enable the combined business to broaden its presence in the UK.

In the 12 months to December 31, 2014, Corbetts had unaudited sales of £9.6m, underlying EBITDA of £1.5m, gross assets of £6.3m and net assets of £4.1m.

The proposed acquisition is expected to be earnings enhancing for 2015 and the Hill & Smith board said it was confident in the prospects of the business going forward.

The acquisition, which is in cash, is being funded from the group’s existing credit facilities.
 
Given the combined size of the two companies, the acquisition is conditional on the approval of watchdog, the Competition & Markets Authority in Phase I. The CMA is expected to begin its public consultation and review process shortly but this process could take around two months to resolve.
 
Hill & Smith said regardless of whether the acquisition was completed, it remained committed to its strategy of developing more substantial businesses in each of its chosen sectors through both organic and acquisitive growth.

Commenting on the proposed transaction, Derek Muir, chief executive of Hill & Smith, said: “The proposed acquisition will enable Hill & Smith to continue its growth momentum in an important part of our UK business, improving service to our existing customers and helping us to target underserved markets in the UK.”