Construction materials distributor Brickability (BRCK:AIM) has announced a major acquisition which as well as expanding its product range and client base is expected to be ‘significantly earnings accretive’.
The firm, which specializes in the supply of bricks, building materials, roofing, heating, plumbing and joinery, has agreed to buy Bristol-based Taylor Maxwell, a leading supplier of timber and non-combustible cladding, for a total consideration of up to £63 million.
Brickability is paying an initial £40 million in cash, together with £10 million in new shares, followed by a deferred amount of up to £13 million based on Taylor Maxwell meeting specific financial targets over the next three years. Shares dipped 3% to 100p.
The deal, the eleventh since the firm came to market in 2018, is being financed through the issue of £55 million of new shares at 95p, on top of which existing shareholders are placing another £38 million of shares.
That gives Brickability the firepower to make more bolt-on deals, and it has already identified five potential candidates including two roofing contractors, a brick and stonework contractor, a flooring company and a renewable energy specialist.
‘The acquisition of Taylor Maxwell will bolster Brickability’s leading position in UK brick distribution, offering cost and revenue synergies while being transformational in terms of the group’s scale and relevance in the wider materials supply industry’, commented the firm’s chairman John Richards.
With regard to supply-side shortages, the firm very sensibly acquired Lincolnshire-based logistics group McCann in December last year for £1.75 million, giving it not only its own pan-European transport network but also, crucially, control of supply lines and access to manufacturers.
