Northern Bear has snapped up Yorkshire interiors firm H Peel and Sons which specialists in hotel and leisure fit-outs
Newcastle construction company Northern Bear has made its first acquisition in almost a decade, a week after announcing soaring profits and sales.
The Prestwick Park group has added to its portfolio of 10 businesses with the acquisition of H Peel and Sons (Holdings) Ltd and its subsidiary H Peel and Sons Ltd, a buy-out which marks a move into the commercial interior design sector.
Based in Dewsbury, West Yorkshire, for more than 50 years, the firm designs and delivers commercial interiors for everything from major breweries, universities and student unions to hotels, health clubs, schools, care homes and offices across the UK.
The management team at H Peel has been with the company for many years and has committed to stay with the business for at least three years post completion of the acquisition.
The Newcastle group said H Peel, which generated turnover of £5.4m in the year ended August 31 2016, makes an excellent fit for it, serving up further sectoral and geographical diversification.
The purchase consideration, payable to vendors Charon LLP and the management of H Peel will be a maximum of around £2.9m.
Around £700,00 is cash is payable immediately, and £400,000 will be deferred in four equal six-monthly instalments starting six months from completion of the acquisition, 461,538 ordinary shares in Northern Bear which are valued at approximately £400,000 and a maximum of £1.4m of contingent cash payable under various earnout agreements.
The acquisition is expected to be earnings enhancing for Northern Bear in the coming year to March 31 2018 and it is anticipated that all future earnout and deferred consideration payments will be met through caash generated by H Peel.
Steve Roberts, executive chairman of Northern Bear, said: "I am delighted to announce our first acquisition for almost 10 years. We have looked at a number of acquisition opportunities in recent years and H Peel was the first one that met all of our criteria.
"We have acquired a well-established, consistently profitable and cash generative business with a strong management team in place who are committed remaining with the business. I would like to welcome all of H Peel's employees to our Group and look forward to working with them."
The deal comes a week after Northern Bear published accounts showing it has wiped out bank debt it accrued during the recession eight years ago, following what it describes as an 'outstanding' trading year.
The Prestwick Park-based group - which consists of firms including Jennings Roofing Ltd, A1 Industrial Trucks, Survey Drones and Northern Bear Building Society Ltd - reported a 31% jump in turnover, from £34.7m to £45.6m for the year ended March 31 2017.
Operating profit also rose considerably, by 25.7% from £2.02m to £2.54m.
The group may also hinted at making acquisitions in the full year results, detailing how it continues "to be presented with a number of acquisitions of specialist building services businesses could further enhance the group's service offering to customers."