Bear hugs Jennings for £5m

YORKSHIRE business Jennings Roofing has been bought by building materials and services group Northern Bear.

The deal, worth up to £5.1m, sees Leeds-based Jennings, which specialises in commercial and residential work, boost the North East operations of Northern Bear.

Founded in 1960, £9m turnover Jennings Roofing is one of the longest-established and most successful roofing contractors in the Yorkshire region, employing 60 people from its South Leeds head office.

Having announced last week that it had raised a new £11m acquisition fund, Northern Bear has used a tranche of this money on its first acquisition in Yorkshire following a year of growth in the North East region.

The deal, backed by funding from Yorkshire Bank and structured by BTG McInnes Corporate Finance , sees the business acquired from Graham Jennings, son of founder Roy.

Led by executive chairman and well-known regional business figure Jon Pither, Northern Bear is expanding by purchasing mature, profitable owner-managed companies in the building services sector with strong management teams that are willing to remain in their positions.

Jon Pither commented: "Having raised a significant new acquisition fund, it is very pleasing to be able to make use of it so quickly, and to bring another well-regarded, family-run building services firm into the group. Jennings Roofing is a highly successful business with a strong order book for the coming year and fits extremely well within the Northern Bear portfolio."

The Yorkshire firm has become Northern Bear's fourth acquisition since its AIM flotation in December last year and takes the total number of companies in the group into double figures with further acquisitions planned before the end of the financial year.

Graham Jennings, who will remain managing director of the business said: "To become part of this emerging force in the building services sector is a massive step forward for us and opens up a whole new chapter in the firm's development.

"It's business as usual in many ways for Jennings and we will be continuing to deliver the high quality work we are already known for, but as part of a bigger group we have a chance to grow and broaden our client base.

"We have new resources, economies of scale and increased reach to enable our growth as the hub of a new cluster of complementary building services businesses," he continued.

As well as its head office in Leeds, the company also has premises in Pontefract and Manchester and has enjoyed strong growth over recent years on the back of both major public and private sector contracts.

Like many of the firms in the Northern Bear group, Jennings has increased its public sector revenues through work with local authorities via the Decent Homes programme, which aims to bring all socially-owned houses up to agreed Government standards by 2010.

Steve Roberts of BTG McInnes in Leeds said: "Jennings has taken a great opportunity to become a significant part of a big success story and the deal opens up a great number of opportunities for the firm that will ensure future growth.

"Northern Bear's growth strategy is to actively seek complementary businesses to integrate with the Group," he added.

Gary Macnair and Simon Murden led the team from Yorkshire Bank, which funded the deal for Northern Bear plc, and John Nicholson of Mincoffs solicitors provided legal support for the Group.

The shareholders of Jennings Roofing Ltd Limited were advised by BDO Stoy Hayward's Leeds office and Walker Morris solicitors.

Jennings Roofing has worked on high profile Yorkshire projects including the West Yorkshire Playhouse and the headquarters of the Halifax plc in Leeds. The firm has recently begun a major contract on behalf of the Ministry of Defence at the Army's largest base, Catterick Garrison.

In the year to April 30 Jennings had turnover of £7.1m and a combined profit before tax of £680,000, after payments to directors of £700,000.

Northern Bear said that the payments to directors would drop by more than £500,000 following the acquisition. Jennings had net assets of £1.4m at the end of April.

Northern Bear will pay £3.23m in cash and up to £600,000 more depending on Jennings' future performance. The £1.27m balance will be paid through the issue of new shares in Northern Bear, which is quoted on the Alternative Investment Market.