5th Aug 2015 07:03
LONDON (Alliance News) - Electra Private Equity PLC on Wednesday said it has agreed to sell its ventilation systems manufacturer Nuaire to London-listed Polypipe Group PLC, which manufactures plastic piping systems, in a deal valued at about GBP145 million in cash.
In a statement, Electra said it would receive about GBP72 million on completing the deal, an uplift of GBP24 million on the value it gave to Wales-based Nuaire at the end of March. That implies a 49 pence increase in diluted net asset value per share, the private equity investment trust said.
Electra originally invested GBP23 million in the management buyout of Nuaire in 2007.
"Nuaire is another great example of the benefits of Electra's flexible investment mandate, namely the ability to hold for the long-term. When the construction market softened during the financial crisis, we were able to adjust our timing horizons and help management to continue to grow and develop the business which they have done extremely effectively," Alex Fortescue, Chief Investment Partner at Electra Partners, the manager of the trust, said in a statement.
Polypipe said it will pay the GBP145 million on a debt and cash-free basis, financing the purchase with a combination of existing cash on its balance sheet and new debt.
"We have long been an admirer of Nuaire and this acquisition provides a perfect fit for us. Nuaire expands considerably our product platform and market reach within the growing ventilation sector, which, like other parts of our business, are being positively impacted by environmental legislative change," Polypipe Chief Executive David Hall said in a statement.
"Nuaire will continue to operate as an independent division, as we leverage the capabilities of the combined group to drive growth, bringing more choice to our broader customer base. We are delighted to welcome Nuaire's management and staff as we look forward to accelerating the strategic development of the enlarged group," Hall added.
According to Polypipe, Nuaire has more than 5,000 customers in the UK and overseas. Most of its UK customers are contractors and building consultants. It designs, manufactures and distributes ventilation systems to the UK commercial, residential and international ventilation markets.
Nuaire's sales amounted to GBP63.5 million in the twelve months to the end of June, Polypipe said, equivalent to an 18.8% increase on the same period last year. The acquisition's earnings before interest, tax, depreciation and amortisation were up 29.4% at GBP12.8 million, Polypipe said.
Polypipe said it remains confident that its own results for 2015 will be in line with board expectations.
By Samuel Agini; [email protected]; @samuelagini
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