Franchise Brands PLC on Monday purchased Hydraulic Authority I Ltd, the owner of Pirtek Europe, an established European provider of on-site hydraulic hose replacement and associated services, for £212.2 million.

The Manchester-based firm will fund the deal, which includes £12.2 million of cash, debt and working capital adjustments, via new bank facilities of £110 million and a minimum £110 million of new equity.

The owner of the ChipsAway, Willow Pumps and Metro Rod brands said the equity issue would include consideration shares up to £18.9 million, a subscription with Pirtek management and employees of around £4.8 million and a placing to raise at least £90 million.

The placing will be undertaken at 180 pence per share by way of an accelerated book build and will be made available to new and existing institutional investors.

Pirtek Europe is an established European provider of on-site hydraulic hose replacement and associated services, operating via 213 service centres and 838 mobile service units.

It currently operates in eight European countries, including the UK, and has the potential for geographical expansion with the right to operate in an additional eight European countries.

All members of Pirtek’s senior management team are expected to remain with the enlarged group, with chief executive, Alex McNutt, to join the Franchise board on completion of the deal.

Forecast revenue of the enlarged group are £155 million in 2023 and £182 million for the following year, resulting in forecast adjusted earnings before interest, tax, depreciation and amortisation of £29.0 million and £36.9 million.

Shares in Franchise Brands closed up 0.7% at 246.74 pence each in London on Monday.

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