TIDMHEAD
RNS Number : 6293Y
Headlam Group PLC
07 December 2017
7 December 2017
Headlam Group plc
('Headlam' or the 'Company')
Acquisition of Domus Group of Companies Limited ('Domus')
Headlam Group plc (LSE: HEAD), Europe's largest distributor of
floorcoverings, is pleased to announce the acquisition of Domus,
the UK's leading specification consultant and supplier of hard
surfaces for premium construction and refurbishment projects, for a
total maximum consideration of GBP35.4 million (the
'Acquisition').
Domus's core product offering is premium ceramic tiles and
engineered flooring, encompassing engineered wood, luxury vinyl
tiles ('LVT') and laminate, for application into the residential
and commercial project markets. The products are sourced primarily
from manufacturers located in Italy, with long-term supply
arrangements covering the majority of product lines. Product
specifications and orders are achieved by Domus working
predominately with architects and interior designers throughout the
design phase of a project. Large-scale schemes completed include
Battersea Power Station, Wembley Stadium, Terminals 2 and 5 at
London Heathrow Airport and the new U.S. Embassy in Nine Elms,
South London. In 2016 Domus completed over 3,500 projects for a
diverse customer base across commercial office, residential,
leisure and retail sectors. For the financial year ended 31
December 2016, Domus reported revenue, EBITDA and profit before tax
of GBP29.6 million, GBP4.4 million and GBP2.9 million respectively,
with a closing order book of GBP7.8 million and gross assets of
GBP20.4 million.
Domus will continue to be operated under its existing Domus
brand by the incumbent management team as a distinct business unit
of the Company. Jon Newey, Domus's Chief Executive, has been with
Domus since 2001 having led a management buy-in at that time with
other members of the existing senior management team.
The Acquisition reflects the Company's stated strategy of
acquiring businesses that have a strategic benefit, bring further
geographic coverage, and increase or expand the Company's market
presence into certain product lines and market segments. The
Acquisition is complementary to the Company's market-leading core
business which supplies a high volume of small orders into both the
residential and commercial sectors, and has minimal overlap in
terms of current product lines, suppliers and customer base. Domus
diversifies and broadens Headlam's overall position in the
floorcoverings market with entry into ceramics and an increased
weighting in engineered wood, LVT and laminate, incorporating
product lines that continue to achieve ongoing growth in the
market.
In addition, Domus significantly increases the Company's
presence in the commercial specification market and brings
considerable expertise into the Company, providing a platform to
pursue further domestic and international growth opportunities.
Terms of the Acquisition
Under the terms of the Acquisition, Headlam has acquired the
entire issued share capital of Domus from Alcuin Capital Partners
LLP and the senior management of Domus, on a cash-free, debt-free
basis, for a total maximum consideration of GBP35.4 million.
The total consideration comprises an initial cash consideration
of GBP29.4 million paid on completion and satisfied by the
Company's existing cash and debt facilities; a deferred
consideration of GBP3.3 million, payable in cash and ordinary
shares of 5 pence each in the capital of the Company ('Ordinary
Shares'), of which GBP1.6 million is payable on 7 December 2019 and
GBP1.7 million is payable on 7 December 2020 (the 'Deferred
Consideration'); and a further maximum contingent consideration of
GBP2.7 million, payable in cash based on Domus achieving certain
EBITDA targets over the three-year period ending 31 December
2020.
GBP1.5 million of the Deferred Consideration will be satisfied
by the issue of new Ordinary Shares, with 88,350 Ordinary Shares to
be issued on 7 December 2019 and 187,116 Ordinary Shares to be
issued on 7 December 2020, at an issue price of 535.42 pence each,
being a 5 per cent discount to the average closing price of the
Company's Ordinary Shares for the 30 trading days prior to the date
of this announcement.
The acquisition is expected to be immediately earnings enhancing
and will improve the Company's overall margin mix.
Steve Wilson, Chief Executive of Headlam, said:
"Domus is a significant addition to Headlam and broadens our
overall position in the industry. Domus provides us with meaningful
product, supplier and customer diversification and expansion into a
market segment that offers higher levels of profitability and
additional growth opportunities.
"Domus holds a highly respected market-leading position with
strong national brand coverage developed over many years, and the
strength of its market recognition is evident in the high-profile
projects completed, extensive pipeline of project opportunities and
order book. This, together with the established and cash generative
nature of its business model, provides a solid platform from which
to pursue a number of potential growth opportunities."
Headlam has today issued a separate Trading Update
announcement.
Enquiries:
Headlam Group plc Tel: 01675 433 000
Steve Wilson, Chief Executive
Catherine Miles, Director
of Communications
Investec Bank plc (Corporate Tel: 020 7597 5970
Broker)
Garry Levin / David Flin
/ Alex Wright
Buchanan (Financial PR and Tel: 020 7466 5000
IR)
Mark Court / Sophie Wills
/ Catriona Flint
Notes for Editors:
About Domus (www.domusgroup.com)
Established in 1964, Domus is the UK's leading specification
consultant and supplier of ceramic tiles for premium construction
projects, primarily in commercial office and residential sectors as
well as leisure, retail and education, with a fast-growing presence
in engineered flooring and other hard surfaces. It has created its
dominant position in the UK and international presence through a
highly targeted sales and marketing programme, focused on the needs
and demands of the architectural design community. This
professional approach is built on exceptional design-led service,
technical expertise and a comprehensive, innovative product
range.
A team of 30 sales people operate primarily from Domus's three
award-winning London specification centres which service the London
and South-East region supporting architects on large projects and
also interior designers and high-end consumers on smaller schemes.
The team monitors and services a pipeline of over 5,000 project
opportunities each year across a broad range of markets and
sectors, and is supported by a highly responsive customer services
and delivery team.
The business has long-term relationships with some of the best
manufacturers in the world to provide premium materials into a
design community with a strong appetite for new products.
The Domus brand is highly respected in the industry for its
quality, professionalism and trustworthiness as evidenced by its
history of winning some of the largest and highest profile projects
in the market including Battersea Power Station, Television Centre
- White City, and the new U.S. Embassy in Nine Elms, South
London.
About Headlam (www.headlam.com)
Headlam is Europe's largest distributor of floorcoverings having
grown significantly via organic growth and acquisition since
1992.
Headlam's core business provides the distribution link between
suppliers and customers of floorcoverings, providing suppliers with
the greatest coverage and customer penetration for their products
across the UK and Continental Europe, and customers with the
broadest range of products supported by next day delivery. The
acquisition of Domus, the UK's leading specification consultant,
extends the Company's activities into the supply of hard surfaces
for premium construction and refurbishment projects.
The Company is engaged with suppliers across 17 countries whose
products cover a significant proportion of the floorcoverings
market including, carpet, residential vinyl, wood, laminate, luxury
vinyl tile, ceramic, underlay and commercial flooring. The
Company's customers are within both the residential and commercial
sectors and comprise principally independent retailers and flooring
contractors.
The Company comprises 62 wholly-owned businesses in the UK and
Continental Europe each operating under their own trade brand and
utilising their individual sales team which achieves a greater
reach into the customer base.
Each of the businesses is supported by the Company's centralised
and financial resources and extensive distribution network across
the UK and Continental Europe.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQFSMEEMFWSELE
(END) Dow Jones Newswires
December 07, 2017 02:01 ET (07:01 GMT)
Headlam (LSE:HEAD)
Historical Stock Chart
From Apr 2024 to May 2024
Headlam (LSE:HEAD)
Historical Stock Chart
From May 2023 to May 2024