Hill & Smith disposes of subsidiary in £5.1m deal
CONSTRUCTION products supplier Hill & Smith has sold its West Bromwich subsidiary Ash & Lacy Building Systems in a deal worth £5.1m.
The Shirley based group has sold the firm, which also has depots in London and Glasgow, to newly-formed GG 149 Ltd, which is lead by management team Jonathan Evans and Ian French.
The deal was originated by Birmingham based Cattaneo following the decision by Hill & Smith to focus on its core businesses. Cattaneo advised the GG 149 management team on the acquisition and arranged funding for the transaction.
Hill & Smith said the deal, which includes the repayment of net debt of £2.8m, was expected to result in a loss on disposal of £5.9m. This will be recorded in the group’s financial statements as a non-underlying item.
Derek Muir, chief executive of Hill & Smith, said: “The disposal completes our strategic repositioning of Hill & Smith away from building and construction activities and enables the Group to focus upon the core higher added value businesses involved in infrastructure products and galvanizing services”.
Ash & Lacy is a £24m turnover manufacturer and distributor of metal external building envelope systems. It distributes its products throughout the UK and, increasingly, abroad from its manufacturing operation in West Bromwich as well its other depots.
The business, which employs 120 people, is set to benefit rom the trend towards modern, sustainable low-carbon methods of construction. The lightweight systems are used for the refurbishment of residential and commercial buildings.
Mr Evans joins Ash & Lacy as chief executive, having previously been chief executive of Banro Sections, now part of Kingspan plc. Mr French, formerly of Hill & Smith, will take up the position of commercial director.
The Cattaneo team, which comprised Martyn Pilley and Stephen Bishop, structured the funding through a combination of management investment and an asset-based lending agreement. It negotiated a debt package from Leumi ABL, led by Jason Holland, regional sales director for the Midlands.
Paul Bennett, of George Green, advised the management team on the legal aspects of the transaction while Leumi ABL was advised by Carol Betts and Ruth Heaton, of Gateley and GoIndustry DoveBid. Tax advice was provided to the management team by Grant Thornton. Orbis Partners, led by Chris Gregory and Hoi-Lem Lee, advised Hill & Smith, which received legal advice from Andrew Glaze, of Wragge & Co.
