Marshalls plc. Acquisition of CPM Group Limited

Transcription

1 Marshalls plc Acquisitin f CPM Grup Limited

2 Strategic backgrund Business verview The market Prduct range Financial infrmatin Deal structure Funding Find ut mre nline Find us n Facebk MarshallsGrup Fllw us n Fllw us n LinkedIn Marshalls Fllw us n YuTube MarshallsTV 1

3 Strategic backgrund CPM is a precast cncrete manufacturer which specialises in undergrund water management slutins. This is a significant step in the stated strategy f prviding a full Water Management capability. Water Management is a strategic fcus fr Marshalls and is a key part f ur 2020 Strategy. Gaining access t this new but cmplementary area thrugh CPM s extensive prduct prtfli will accelerate ur strategic prgress in Water Management. The acquisitin will enable us t ffer custmers a brader prduct chice that cmplements ur existing Water Management ffering. Marshalls Water Management 2

4 Business verview CPM is a specialist manufacturer f undergrund cncrete pipes, cnveyance and water management systems in the UK, targeting the Public Sectr and Cmmercial end market. CPM has a cmprehensive range f technical and innvative water management slutins. Manufacturing takes place at tw sites ne at Mells (Smerset) and ne at Pllingtn (East Yrkshire). There are ancillary ffices in the Midlands and Sctland. The business has apprximately 350 emplyees, with the majrity based at the Smerset head ffice site. CPM is a prfitable business with a strng track recrd f quality and service. The business will trade initially as Marshalls CPM, within the wider Marshalls Grup. 3

5 Market backgrund Marshalls is currently active in abve grund, linear drainage prducts, cmbined kerb and drainage systems. CPM s rutes t market are thrugh merchants, albeit the Cmpany supplies new husebuilding and infrastructure prjects (including Hinkley Pint, HS2, and A14 Cambridge). Marshalls currently des nt trade in belw grund UK drainage prducts. The acquisitin f CPM will expand Marshalls prduct range int belw grund drainage. The acquisitin f CPM will als enable Marshalls t deliver a fuller system-based water management prpsitin. 4

6 Prduct range CPM manufactures precast cncrete, belw grund drainage prducts and systems. It perates in the cllect, cnveyance, clean, hld/release, and recycle areas f the undergrund market and can ffer a full system design capability. The prduct ranges include: Cllect: gulley pts and cvers Cnveyance: pipes, traditinal and sealed manhles Clean: hydrdynamic vrtex separatrs and filters Hld/release: attenuatin tanks, flw cntrl and perfrated pipes Recycle: rainwater harvesting chambers The prvisin f bespke ff-site slutins is a particular grwth area. 5

7 Financial infrmatin Frecast revenue fr the year ending 31 December 2017 is 55.4 millin (2016: 51.2 millin). Frecast prfit befre tax fr 2017 is 4.7 millin (2016: 4.6 millin). Frecast EBITDA in 2017 is 6.7 millin (2016: 6.3 millin). Recent grwth has been driven by an expansin in prductin capabilities and the sites at Mells and Pllingtn nw bth prduce arund 170,000 tnnes per annum. Net assets at 31 December 2016 were 14.4 millin and the balance sheet is supprted by a strng fixed asset base. Grss assets were 33.0 millin at December

8 Deal structure Cash cnsideratin f 38.3 millin fr the entire share capital f CPM. Cash free / debt free basis. N earn ut althugh the CPM executive management team will be incentivised by an equity scheme ging frward. The acquisitin cst represents 7.8 times 2016 EBIT 6.1 times 2016 EBITDA The acquisitin is expected t be earnings enhancing in its first full year after cmpletin. The acquisitin will be funded frm existing Grup facilities. An additinal 20 millin debt facility line has been established t maintain headrm capacity. Pst cmpletin Net debt : EBITDA and gearing will remain well within ur Grup target metrics and cntinuing headrm capacity. 7

9 Funding and facilities update Expiry date Cmmitted facilities: Facility m Cumulative Facility m Q Q Q Q Additinal 20 millin facility arranged 2022 maturity Cmfrtable facilities and headrm Balance f cmmitted and uncmmitted facilities Cntinuing strng cmfrt against cvenants Q On demand facilities: Available all year Seasnal (February t August inclusive)