Deal for renewable heating and electrical distributor creates £35m business
Project Heating Solutions (PHS), led by founder and MD Russell Steelyard, has acquired specialist renewable heating and electrical distributor AMCO of Doncaster (AMCO).
The acquisition was funded by specialist lender SME Capital and advised on by professional advisory firm Castle Square Corporate Finance and the Sheffield office of national legal services firm Knights.
Formed in 2018 and also based in Doncaster, PHS designs and installs renewable heating technologies and energy saving measures for retrofit residential, commercial and new build property developments.
Its products includes solar PV & battery storage, air source heat pumps, ground source heat pumps, external wall installation, internal wall installation as well as loft installation top up.
AMCO has an extensive network and strategic partnerships with a number of the market’s leading manufacturers located in Asia, Europe and across the UK.
Through the strategic acquisition, forecast annual revenues for the combined businesses are expected to exceed £35m.
The acquisition is intended to provide significant growth opportunities for both trading entities to expand their specialist services to existing and new customers across the UK.
AMCO MD, Steve Bentley, joined the PHS Board of Directors from completion of the acquisition and also purchased a significant equity stake in the buyer as part of the transaction.
Steelyard said: “This acquisition puts us in a unique position in the marketplace and will accelerate our future growth.
“Special thanks to Patrick Lynch and Joe Potts of Castle Square, Michael Hall and Lucy Dougall and the Knights Team and Tim House and the SME Capital Team whom we look forward to working with over the coming months and years, all of which worked tirelessly to enable the acquisition to complete in a timely fashion.”
Led by director Patrick Lynch and supported by Joe Potts, Castle Square Corporate Finance led on deal negotiations on behalf of the buyer and ran a competitive funding process, seeking acquisition and growth capital finance.
Specialist lender SME Capital, led by relationship director Tim House, emerged as the preferred funding partner. It provided acquisition finance and a growth capital funding line to support management’s growth business plan post completion.
Led by corporate partner Michael Hall and supported by Lucy Dougall, Knights provided corporate legal advice services to the buyer, performing legal due diligence on AMCO before delivering legal merger and acquisition advice services.
Lynch said: “Having advised PHS in 2020 on a development capital fundraising it is impressive to see their journey over the last three years and the substantial growth the PHS management team have achieved in this short time, as they now emerge as the UK’s leading renewable heating technologies specialist.
“The acquisition of AMCO forms a key strategic acquisition and the recruit of Steve Bentley will ensure continuity as well as providing extensive expertise to help take the business to the next level.”
House said: “From our first meeting with Russell it was obvious he was committed to growing the PHS business and developing a group able to tackle the demand for renewables.
“Castle Square’s involvement as Corporate Finance Advisor was superb, providing a detailed level of initial information allowing us to make quick decisions and providing follow on detailed documents as part of our full credit underwriting process.”
Hall added: “It has been great to see the growth PHS has achieved in the three years we have worked with them and this transaction puts Russ, Steve and the team in a very strong position to speed the development of PHS into the market-leading renewable heating specialist.”
Other advisors on the transaction included; Clarion’s Leeds office which provided legal advice services to SME Capital; Morton Legal who advised the shareholders of AMCO; and Smith Wilson who provided financial advice services to AMCO shareholders.
