TIDMVANL
RNS Number : 2707U
Van Elle Holdings PLC
01 April 2021
Van Elle Holdings plc
('Van Elle' or the 'Group')
Acquisition of ScrewFast Foundations Limited
Van Elle Holdings plc (AIM: VANL), the market leading
geotechnical and ground engineering group, announces that it has
acquired 100% of the share capital of ScrewFast Foundations Limited
('ScrewFast'), an innovative helical piling and steel modular
foundations company for a maximum consideration of GBP3.68m (the
'Acquisition'). An initial consideration of GBP1.76m is payable in
cash on completion, with up to a further GBP1.92m of deferred and
performance-based cash consideration payable in August 2023.
Highlights:
-- Strengthens the Group's position in its market leading
Specialist Piling segment across growth markets of infrastructure
and housing
-- ScrewFast's helical piling and integrated foundation system
complements Van Elle's existing breadth of capabilities, capturing
more of the value chain through providing modular forms of
construction and enabling cross-selling opportunities
-- Strengthens Van Elle's market leading position in the
highways sector ahead of Highways England's 5-10 year Smart
Motorway Alliance
-- Provides new clients and market opportunities in the power and telecoms sectors
-- Strengthens capabilities for provision of foundation
solutions to the electrification and signalling programmes in the
rail sector
-- The consideration will be funded from existing cash resources
-- Anticipated to be modestly earnings enhancing during the first full year of operation
ScrewFast Foundations Limited
Formed in 2000, ScrewFast has developed a significant track
record within the infrastructure and general civil engineering
markets, with a 15 year track record in highways, and its first
rail schemes date back to 2002. In 2019 the company acquired
Q&E Fabrications Limited, a specialist fabrications business to
provide a full, bespoke service offering of design, fabrication and
installation.
Example projects delivered by ScrewFast over recent years
include providing foundations for temporary venues at the London
2012 Olympics, foundations work on Crossrail, the Leeds Flood
Defence system and numerous highways and Smart Motorway
programmes.
All employees, including the entire management team led by
managing director Dan Dye, will join the Group.
For the twelve months ended 30 May 2020, ScrewFast recorded
revenues of GBP5.9m, EBITDA of GBP0.65m and a profit before tax of
GBP0.36m. Net assets at 31 March 2021 were GBP1.85m and the order
book stood at GBP5.1m.
Strategic rationale for the Acquisition
The Board of Van Elle believes that ScrewFast is an attractive
addition to the Group as customers increasingly seek faster,
modular forms of construction. It is profitable, cash generative,
and operates in complementary market sectors with strong growth
potential in each. ScrewFast is highly regarded by its clients and
by Van Elle, with both companies having worked alongside one
another on Smart Motorways projects for several years.
ScrewFast has patented designs and a proven track record of
installations spanning over 20 years. Its specialist system allows
the installation of steel helical piles without the requirement for
heavy piling equipment or in-situ concrete works and the immediate
installation of modular foundation structures which are built
offsite and connected through proprietary and proven designs, ready
to receive the superstructure. The end-to-end process significantly
speeds-up the construction process, requires less attendant
infrastructure to be provided by the main contractor and reduces
on-site labour compared to traditional construction designs. The
principles are similar to the Group's pre-cast concrete Smartfoot
modular foundation system.
ScrewFast will benefit from the scale, broad capabilities and
financial strength of the Group, which will facilitate an immediate
increase in capacity and access to additional cross-selling and
growth opportunities.
The Group will retain the ScrewFast brand and will position the
business within its Specialist Piling division, taking advantage of
the synergies of shared administrative, commercial and operational
resources in the division and the wider Group.
Complementary specialist piling services in high growth
markets
In addition to its core existing highways market, ScrewFast
operates in the power, telecoms and wider civils markets providing
highly engineered and faster, modular foundation systems that
permit immediate follow-on superstructure works. As a result of the
Acquisition, Van Elle anticipates increasing its market share in
highways and entering the power and telecoms markets more
consistently. Within the rail sector the Group is already well
positioned for growth opportunities in Network Rail electrification
and signalling programmes and will be able to add the ScrewFast
system to its existing array of specialist foundation solutions and
equipment. The Group also anticipates the opportunity to develop
helical piling and steel foundation systems in the modular housing
market to suit lower superstructure loadings, complementing its
existing pre-cast concrete Smartfoot system.
Acquisition consideration
ScrewFast is being acquired for an initial cash consideration of
GBP1.76m, funded from existing cash resources. In addition, a
deferred consideration of GBP0.74m together with a contingent cash
consideration of up to GBP1.18m (subject to certain performance
criteria being achieved) are both payable in cash in August
2023.
Allowing for a period of integration the Acquisition is expected
to be modestly earnings enhancing during the first full year of
operation within the Group. There is an expectation of some initial
working capital support required to deliver contracts in the order
book. Capital expenditure required in the short term is expected to
be minimal and its recent trading performance has delivered a
return on capital employed at the upper end of Van Elle's
medium-term strategic targets.
Mark Cutler, Chief Executive Officer, Van Elle commented:
"This is a very exciting, complementary acquisition focussed on
our higher margin, specialist piling activities which strengthens
our leading position in growth markets such as highways and rail.
ScrewFast has an established client base and proven track record of
highly specialist services and will support the Group in the
delivery of its medium-term strategic objectives. The two
businesses have a similar culture and ethos which is very important
to us, and we look forward to working with the ScrewFast team as we
welcome them into the Group.
"We continue to be encouraged by the Group's progress, with
expectations for the year unchanged from those set out in January.
Whilst we remain cautious, given that the recovery in some of our
markets is still at an early stage, we are very confident that the
Group is well positioned to benefit from the continued execution of
our growth strategy."
Dan Dye, Managing Director, ScrewFast added:
"We have long identified Van Elle as the ideal owner to support
our growth potential. ScrewFast is an innovative and specialist
business that fits well both culturally and technically into the
diverse range of end-to-end services and market prospects offered
by Van Elle, who we have worked alongside on several recent
projects. My whole team is very excited by the opportunities
ahead."
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
Enquiries:
Van Elle Holdings plc Via Walbrook
Mark Cutler, Chief Executive Officer
Graeme Campbell, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Tel: 020 7418 8900
corporate broker)
Mike Bell/Ed Allsopp
Walbrook PR Limited Tel: 020 7933 8780 or vanelle
@walbrookpr.com
Tom Cooper/Nick Rome/Nicholas Johnson 07971 221 972 or 07748 325 236
or 07884 664 686
About Van Elle Holdings plc:
Van Elle Holdings is the UK's largest specialist geotechnical
engineering contractor. The Company provides a range of ground
engineering techniques and services including - ground
investigation, general and specialist piling, rail geotechnical
engineering, modular foundations, and ground improvement and
stabilisation services.
Van Elle operates through three divisions: general piling,
specialist piling and ground engineering; and is focused on three
end markets; residential and housing, infrastructure and regional
construction - across which the Group has completed more than
20,000 projects over the last 35 years.
General piling provides a range of larger piling and ground
engineering solutions for open-site construction projects.
Specialist piling provides a range of geotechnical solutions in
operationally constrained environments including on-track rail
applications. Ground engineering services offers a range of ground
investigation and geotechnical services and modular foundation
solutions such as Smartfoot(R). Van Elle has a market-leading
reputation and the UK's largest modern rig fleet of 118 rigs.
Having floated on AIM in 2016 it now has a strong national
presence, diversified offering and market-leading brand name.
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