Pipe manufacturer Polypipe Group acquires Alderburgh for £14m
Doncaster-based manufacturer Polypipe Group has acquired Alderburgh for £14m, in a transaction led by M&A advisor BCMS.
Headquartered in Rochdale, Alderburgh designs, makes and installs plastic injection moulded storm water attenuation tanks, structural waterproofing and geocellular membranes, gas barrier and ventilation materials.
The business has a 68,000 sq ft manufacturing facility and has approximately 100 employees across sales, R&D, despatch and manufacturing functions. For the year to September 2019, it is forecast to generate revenue of £17m and adjusted EBITDA of £2.1m.
Alderburgh has a solid track record of growth, profitability and successful cash flow generation.
Established in 1980, Polypipe is one of Europe’s largest manufacturers of piping systems, water and climate management systems. Polypipe said its purchase was a “good strategic and cultural fit” for its operations, broadening its Water Management Systems offer, in particular the Versavoid stackable attenuation cell system and Pluvial cube system. These products create load-bearing tanks underground to store storm water and let it drain away naturally, rather than letting storm water rush into the watercourse creating flooding downstream.
Unlike Polypipe’s Polystorm and Permavoid systems which are manufactured as single finished cells, Alderburgh’s Versavoid system is stackable, which means individual parts of the cell can be nested for transportation and assembled on site.
Polypipe added that Alderburgh’s Solutek specialist installation service, gives Polypipe exposure to the high-growth supply and fit market for assemble on site systems. To date, Polypipe has competed mostly in the supply-only part of the market.
Martin Payne, Polypipe Chief Executive Officer, said: “The acquisition of Alderburgh is another step forward in the Group’s stated strategy of filling product gaps and adjacencies, expanding our platform and market reach in the UK, and providing a “one stop shop” for customers.
“Like other parts of our business, the Water Management Systems market is being positively impacted by legislative change, and this acquisition gives Polypipe further exposure to this growing segment of the market.
“Alderburgh will be integrated into our Commercial and Infrastructure Systems segment, where we will focus the capabilities and synergies of the combined group to drive growth.
“We are delighted to welcome Alderburgh’s management and employees to Polypipe. With our solid organic growth drivers, successful acquisitions track record, and a continued healthy pipeline of bolt on acquisitions, the Board believes we have a clear, deliverable strategy that will continue to create excellent shareholder value.”
Following the acquisition it is anticipated that the operational management of Alderburgh will remain with the combined business.
The total consideration of £14m on a cash and debt free, normalised working capital basis comprises the entire issued share capital of Alderburgh Ltd, Alderburgh Ireland Ltd, Solutek Environmental Ltd. and Environmental Sustainable Solutions Ltd from Alderburgh owner, Peter Davidson and others.
BCMS advised Alderburgh with legal advice from law firm Mills & Reeve.
BCMS Lead Advisor Parik Bhandiwad said: “From the beginning there was a good level of interest for Alderburgh, but Polypipe clearly became the best offer for the client’s aspirations. There were many challenges to completion, but both companies complement each other and have similar goals. We wish them both all the best for the future.”