Ultimate Products in £34m takeover deal for iconic houseware brand
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Ultimate Products, the Oldham-based consumer goods brand, has agreed the £34m takeover of Salter Brands, the UK’s oldest houseware brand.
Dating back to 1760, Salter is the UK market leader for bathroom and kitchen scales.
The deal involves a share placing and an offer for subscription through the Primary Bid platform to raise £15m towards the acquisition.
Ultimate Products announced that it has also entered into a new additional £10m conditional term loan agreement with HSBC Bank to part finance the initial consideration. This facility, which runs to October 1, 2024, will sit alongside the group’s existing bank facilities, including, but not limited to, a revolving credit facility with HSBC.
Over time the Salter brand has expanded into other adjacent products categories such as kitchenware and health devices, although household scales remain the core business. Its product portfolio includes:
- Bathroom scales: Salter sells mechanical and electronic bathroom as well as analyser scales that can measure body mass index
- Kitchen scales: Salter sells mechanical, electronic and connected kitchen scales in a wide range of models and designs. Salter has a range of high precision kitchen scales, timers and thermometers in partnership with the renowned British chef Heston Blumenthal
- Other kitchenware: Salter’s wider kitchenware offering includes electronic and manual salt and pepper mills, kitchen thermometers, kitchen timers, handheld electronic milk frothers and stainless-steel reusable straws
- Diagnostic and Healthcare: Salter has a small range of diagnostic health devices including thermometers, blood pressure monitors and oximeters
Since 2011, Ultimate Products has licensed the Salter brand for the sale of kitchen electrical and cookware products, excluding Salter scales, with the current licence due to expire in 2024. The acquisition eliminates royalty payments and risk around the current Salter licence.
Ultimate Products said the acquisition will provide it with the opportunity to further develop Salter’s international sales, which are currently modest.
It will also provide the business with the opportunity to create a more diversified and balanced Salter brand portfolio.
For the financial year ending July 31, 2022, the first full year of ownership of Salter, the Ultimate Products board anticipates that Salter will contribute revenues of approximately £16.7m, EBITDA in excess of £4.6m and underlying profit before tax in excess of £4m.
In a trading upate, Ultimate Products said it anticipates its performance in fiscal year 2021 will be in line with current expectations, with revenues forecast to be in excess of £133m, compared with £115.7m in 2020.
While the group has seen an increase in shipping rates, the board, nevertheless, currently expects that underlying EBITDA for 2021 will be in excess of £13m, against £10.4m the previous year, with underlying profit before tax in excess of £10.8m, up from £8.2m a year ago.
The board also believes that the COVID-19 pandemic will lead to long term changes in consumer attitudes and behaviour, including more home working, more home cooking, a greater emphasis on hygiene and cleanliness, more online shopping and a more considered approach to spending.
As Ultimate Products’ brands are largely focused on the home, the group said it is well placed to take advantage of these trends.
It said this position is reinforced by its focus on leading retailers and the excellent end to end service that it provides to them. It added: “As a result, we are confident in the future prospects for the business.”