Published by Insider Media
DEAL STRUCK FOR £23.1M BUILDERS' MERCHANT
An independent builders' merchant which operates across the North and Midlands has been acquired by listed group Lords in a deal worth £23.1m.
Established in 1964 and family-owned until a management buyout in 2017, AW Lumb is a general merchanting service, with offerings in building materials, garden landscaping, timber and joinery, and roofing products.
Operating out of depots in Dewsbury and Tamworth, in the year to 30 June 2021 the company generated revenues of £43.3m, EBITDA of £3.9m and a pre-tax profit of £3.8m.
The acquisition provides Lords with an extension of its product offering and geographical reach into the North. Both key senior management from A.W. Lumb and its 77 employees will also be joining the group.
The total acquisition consideration of £23.1m comprises £19.5m due on completion and a deferred consideration of £3.6m payable in equal annual instalments over the next five years.
Shanker Patel, chief executive of Lords, said: "This acquisition delivers against our strategy of gaining market share through geographic expansion and product range extension. Specifically, it gives Lords broader reach in the North of the country.
"AW Lumb is highly regarded in its local markets, respected for its product expertise and superior service levels and we are delighted to welcome their 77 colleagues and senior management to our team, who we believe share the same values as Lords.
"Furthermore, this acquisition is a major milestone in our growth and supports our stated ambition to reach £500m revenue by 2024."
Cenkos Securities is acting for Lords.
Meanwhile, Lords has also agreed with its lender, HSBC, to increase the level of its revolving credit facility from £30m to £50m. The bank has also agreed to increase the group's invoice discounting facility from £10m to £20m.
This increased debt capacity will provide the company with additional resources with which to continue to take advantage of further accretive acquisition opportunities.