NWF expands its fuels division with £8m acquisition

An £8.3m acquisition deal will boost the fuels operation at Nantwich-based food, feed and fuel distributor, NWF Group.

The group announced this morning that it has acquired Harrogate-based Northern Energy Oil in line with its strategy to grow its fuels distribution business through consolidation, which represents the third largest operation in the UK.

Northern is a 42 million litre fuel distributor operating five sites in North Yorkshire, Northumbria and Lincolnshire, with a largely domestic customer base.

The acquisition increases NWF’s presence in the North East of England, where it is currently under-represented. Northern will increase NWF’s total fuel volumes by about six per cent. on a pro forma basis.

The total consideration for Northern is £8.3m, which comprises £7.3m paid in cash on completion from NWF’s existing cash resources, with the remaining £1m being held on retention to be released in three tranches, subject to the vendors complying with certain post-completion conditions, which are expected to be met within the next 18 months.

In the 12 months to August 31, 2024, Northern generated revenue of £35.1m, EBITDA of £0.6m, profit before tax of £0.1m and had period end net assets of £2.7m.

These results included costs of approximately £0.6m relating to other business activities of the owners of Northern which will not be incurred following completion of the transaction.

Northern is expected to be immediately earnings accretive and to benefit from margin expansion once fully integrated into the group’s existing infrastructure.

Chris Belsham, CEO of NWF Group, said the acquisition represents an excellent example of NWF’s strategy at play to consolidate the highly fragmented fuels distribution market.

He added: “This acquisition, our first since Geoff Boorman in 2023, demonstrates our intent to pursue attractive, earnings accretive transactions, consistent with our strong and established track record.

“Our pipeline of potential fuels acquisitions remains active, supported by our robust financial position. I would like to welcome our new Northern colleagues to the group.”