20 September 2024
Volution
Group plc
Agreement to acquire Fantech
Group in Australasia for AUD$280 million
(£144million1)
Volution Group plc ("Volution" or
the "Group"), a leading international designer and manufacturer of
energy efficient indoor air quality solutions, is pleased to
announce that it has signed an agreement to acquire the Fantech
Group of companies from the owners of the UK based Elta Group
Ltd.
Fantech Australasia
The Group has signed an agreement to
acquire 100% of the holding company of the Fantech Australasia
business ("Fantech" or "the Company") for an initial consideration
of AUD$220
million (£112.9
million1) on a debt/cash free
basis, with further non-contingent consideration of AUD$60
million (£30.8
million1) payable twelve months
after the completion date.
For the financial year ended 31
March 2024, Fantech reported audited revenue of AUD$ 177.0 million (£90.8 million1) and
EBITDA of AUD$ 33.3 million (£17.1 million1).
The transaction is consistent with Volution's
long-established strategy of acquiring leading ventilation brands
to extend our routes to market and builds on the Group's successful
expansion in the region since our first acquisition of Simx in
March 2018.
Fantech, which includes the Fantech,
Ideal Air, NCS Acoustics, Air Design, Major Air, Systemaire and
Burra Steel brands, is a leading provider of both commercial and
residential ventilation in Australia and commercial ventilation
solutions in New Zealand. Originally formed in 1973 as the Air
& Noise Equipment Group and transitioning to the Fantech brand
in 1982, Fantech has been one of the leading providers of
ventilation equipment in the region for over 50 years. In 2021, the
Company moved to a new 20,000m2 purpose-built and future-proofed
headquarters in Melbourne which has considerable operating
footprint capacity available, allowing for the continuation of its
strong growth trajectory. Fantech has 13 manufacturing, warehouse
and sales locations across Australia and New Zealand, and over 350
employees.
Transaction highlights:
- The acquisition will
enhance Volution's market position in the Australasian region
through Fantech's highly recognised and market leading brands
extending the Group's reach into new end market applications with
particular emphasis on the commercial sector.
- Post completion of the transaction and on a pro-forma basis,
Australasia will represent over 30% of Volution's
revenue.
- In Australia, the Group
will combine its existing leading range of low energy ceiling fans,
trading as Ventair, with Fantech, a leading provider of commercial and residential
ventilation.
- In New Zealand, Fantech
activities are primarily focused on the commercial market, whereas
Volution's existing Simx and DVS brands are mainly residentially
focused.
- The acquisition gives
the Group a broad and diversified customer base with access to both
distribution and trade contractor customers across
Australasia.
- The acquisition will be earnings accretive immediately upon
completion, with the Group maintaining its adjusted operating
margin post completion above the long-term target of
20%.
Conditions to completion of the
transaction include anti-trust approvals which we are optimistic
will be satisfied within approximately two to three
months.
Refinancing of the Group's Revolving Credit
Facility
The Group has recently completed the
refinancing of its previous revolving credit facility with a new
£230 million multi-currency Sustainability Linked Revolving Credit
facility (plus £70 million uncommitted accordion facility).
The new facility has an initial term of three years until September
2027 with options to extend for up to two additional
years.
The transaction will be financed
using proceeds of the new facility plus cash on the balance sheet.
Leverage (see note 3), which is expected to be c0.4x at 31
July 2024, is expected to be in the range of 1.5-1.7x on a proforma
basis post completion of the transaction, with the Group's usual
strong de-leveraging profile taking effect after the payment of the
deferred consideration 12 months post completion.
Ronnie George, Volution Chief Executive Officer,
commented:
"This acquisition, our largest to
date, gives Volution a great platform to continue our growth in
Australasia. We are excited by the opportunities available to us
through owning such a well-respected and successful group of
brands. Fantech is a leading provider of commercial ventilation
solutions in Australia and New Zealand, and complements our
existing local market positions in Ventair, Simx and DVS Proven
Systems very well.
"I would like to welcome our 350
Fantech colleagues to Volution and I look forward to working
closely with them once the acquisition completes. The combination
of Fantech's strong and longstanding trading in the region with
greater access to Volution's wide product portfolio gives us an
enviable platform for growth."
Volution will host a Zoom call for
analysts and investors at 9.00am today. Please contact
FTI_Volution@fticonsulting.com for details and to register to
join.
-ends-
Notes:
1. Based on an AUD$:£ exchange rate of 1.948:1 being the closing
rate as at 19 September 2024
2. Cash conversion defined as: Adjusted operating cash flow /
(Adjusted operating profit + amortisation).
3. Leverage defined as adjusted EBITDA divided by net debt (excl.
IFRS16 liabilities)
For
further information:
Volution Group plc
Ronnie George, Chief Executive
Officer
+44 (0) 1293 441501
Andy O'Brien, Chief Financial
Officer
+44 (0) 1293 441536
FTI
Consulting
+44 (0) 203 727 1340
Richard Mountain
Susanne Yule
This announcement includes inside
information (as defined by Article 7 of the Market Abuse Regulation
(EU) No 596/2014, as it forms part of the UK domestic
laws by virtue of the European Union (Withdrawal) Act 2018).
Upon publication of this announcement, this information is now
considered to be in the public domain. The person responsible
for arranging the release of this announcement on behalf of
Volution is Fiona Smith, Company Secretary.
Volution Group plc Legal Entity
Identifier: 213800EPT84EQCDHO768.
Note to Editors:
Volution Group plc (LSE: FAN) is a
leading international designer and manufacturer of energy efficient
indoor air quality solutions. Volution Group comprises 22 key
brands across three regions:
UK: Vent-Axia, Manrose, Diffusion,
National Ventilation, Airtech, Breathing Buildings,
Torin-Sifan.
Continental Europe: Fresh, PAX,
VoltAir, Kair, Air Connection, Rtek, inVENTer, Ventilair, ClimaRad,
ERI Corporation, VMI, I-Vent.
Australasia: Simx, Ventair, Manrose,
DVS.
For more information, please go
to: www.volutiongroupplc.com
Cautionary statement regarding forward-looking
statements
This document may contain forward-looking statements which are
made in good faith and are based on current expectations or
beliefs, as well as assumptions about future events. You can
sometimes, but not always, identify these statements by the use of
a date in the future or such words as "will", "anticipate",
"estimate", "expect", "project", "intend", "plan", "should", "may",
"assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. You should not place
undue reliance on these forward-looking statements, which are not a
guarantee of future performance and are subject to factors that
could cause our actual results to differ materially from those
expressed or implied by these statements. The Company undertakes no
obligation to update any forward-looking statements contained in
this document, whether as a result of new information, future
events or otherwise.
