2nd Nov 2015 09:26
LONDON (Alliance News) - Epwin Group PLC Monday said it has bought wood plastic composite manufacturer Vannplastic Ltd for an intial consideration of GBP5.2 million and an earn-out consideration of GBP3.3 million.
Epwin, which manufactures extrusions, mouldings and fabricated building products, said it will pay GBP3.6 million in cash and GBP1.6 million in 1.2 million Epwin shares at a price of 133.7 pence each. Shares in Epwin were trading down 0.7% at 129.15 pence Monday morning.
The earn-out consideration of GBP3.3 million is dependent on Vannplastic's performance in 2016 and will be settled in the same ration of cash to shares as the initial consideration.
In 2014, Vannplastic, which trades under the name Ecodek, made revenue of GBP4.1 million and an operating profit of GBP0.6 million. Current year performance is expected to deliver earnings before interest, tax, depreciation and amortisation of GBP1 million.
The acquisition is expected to be earnings enhancing in 2016 and will not have a material impact on Epwin's earnings in 2015, the company said.
Wood plastic composite is primarily used as a hardwood substitute for balconies and outdoor decking.
Epwin added that despite challenging market conditions, its full-year profit for 2015 should be in line with market expectations.
"I am delighted to announce the acquisition of Ecodek and welcome the team there to the group. Ecodek adds to the group's range of low maintenance building products and brings exciting new materials technologies into the group as well as real developmental expertise. The acquisition represents an important first step in the development of the group and is expected to enhance earnings from 2016," Chief Executive Jon Bednall said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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