Shipley supplies group to spend £3.3m to acquire Norfolk firm
WORKPLACE supplies group Slingsby is to pay £3.3m to acquire Norfolk-based ESE Direct.
The purchase is expected to contribute to profits immediately, while adding economies of scale to the group.
The deal is for £3.9m, but a condition of the deal is that ESE has £600,000 cash in the bank. ESE achieved pre-tax profits of £350,000 on turnover of £6.5m in 2014.
“We have been looking at suitable targets for some considerable time and ESE Direct is an excellent fit,” said Slingsby’s managing director Dominic Slingsby.
“The incremental profitability and synergistic benefits will place the wider group in a far stronger position for both companies to better exploit opportunities in their respective market sectors.”
No directors of ESE will be joining the board of Slingsby.
Shipley-based Slingsby, which was founded in 1893, has been through a period of “radical restructuring” after recording a £249,000 loss in its last published accounts, for 2013. Sales for the first half of last year were down further, but the cost savings from the restructure are expected to have improved the second-half results.
Ian Marwood of Sentio Partners and Hannah Kendrick of Squire Patton Boggs advised Slingsby on the acquisition. Financial due diligence was provided by Yorkshire-based Rob McCarthy of Dow Schofield Watts Transaction Services and technical due diligence by Intuitus. Funding was provided by HSBC, led by Wayne Shadlock and David Postlethwaite.
