Franchise firm acquires drainage specialist for £12.5m
A Cheshire based franchise specialist has made its latest acquisition for £12.5m.
Macclesfield based Franchise Brands has announced it has acquired a leading water pump supply, installation and servicing business to complement and expand its Metro Rod’s drainage and plumbing businesses.
Franchise Brands has acquired the entire issued share capital of WPL Group Holdings Limited and its subsidiaries, Willow Pumps Limited and Willow Drainage Limited for £12.5m.
The deal is for an initial consideration of £5m and a performance-based deferred consideration of up to £7.5m payable over the next five years.
The Initial Consideration has been paid as £4m in cash and £1m through the issue of 1,212,121 new ordinary shares.
Willow Pumps, founded in 1992, is a leading water pump supply, installation and servicing business, with a below-ground (foul water) and above-ground (fresh water) capability.
The firm achieved revenue of £12.4m, EBITDA of £1.6m and a profit before tax of £1.1m in the year ended 31 December 2018.
The board believes the acquisition will be significantly earnings enhancing for the group.
Willow Pumps will benefit from a significantly expanded delivery capability through Metro Rod’s national network of over 400 engineers working out of 43 depots across the UK.
The principal vendor, Willow Pumps’ founder and managing director Ian Lawrence, will continue to manage the business and becomes part of Franchise Brands’ senior management team.
Willow Pumps will continue to operate as a direct labour organisation (“DLO”) within Franchise Brands, working closely with Metro Rod and its franchisees and benefiting from the group’s management, resources, and commercial customer relationships.
Stephen Hemsley, executive chairman of Franchise Brands, said: “I am delighted to announce the acquisition of Willow Pumps, which represents an important step in expanding Metro Rod’s scope of services to the commercial market, consistent with our Vision 2023 strategy.
“The longer-term aim of the group is to be able to serve our valued commercial customers with a “water in, waste out” range of drainage, pumps and plumbing-related services on a national basis.
“The acquisition of Willow Pumps, a highly respected business and one of the leaders in the market, which Metro Rod has already worked alongside, provides the optimum way for Metro Rod to enter the specialist pump sector and develop this expertise across our franchise community.
“The deal structure also provides a significant incentive for Willow Pump’s management team to continue to grow its existing business by developing the many national accounts where Metro Rod only provides drainage services at present. As such, the board of Franchise Brands believes the acquisition will be significantly earnings enhancing for the group.
“I am really looking forward to working with Ian Lawrence and his high quality management team to create a national leader for drainage, pumps and plumbing services.”
The second half of the financial year ending 31 December 2019 has started encouragingly, with momentum being maintained in Metro Rod’s Systems Sales growth with an increase year-to-date of 15 per cent.
Metro Rod franchisees continue to invest in their businesses, including the continued expansion of the tanker fleet. The first of our new Vision 2023 depots is also due to open shortly in Lincoln.
