REG - Brickability Group - Acquisition of TSL Assets Limited

BrickabilityAnnouncement

22/01/2024 07:00

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RNS Number : 3618A  Brickability Group PLC  22 January 2024

22 January 2024

 

Brickability Group plc

 

("Brickability" or "the Group")

 

Acquisition of TSL Assets Limited

 

Notice of Pre-Close Trading Update

 

Further increase in presence in cladding remediation market and
diversification of the Group's product portfolio and geographic reach

 

Brickability Group plc (AIM: BRCK), the leading construction materials
distributor is pleased to announce that it has completed the acquisition of
Topek Southern Limited ("TSL") for a consideration of up to £48m through the
acquisition of the entire issued share capital, business and operations of TSL
Assets Limited (the "Acquisition").

 

Established in 2009, Hampshire-based TSL delivers façade systems, fire
remediation, roofing, and curtain wall solutions for both live and occupied
sites. TSL acts as a Principal Contractor for commercial and industrial
projects across the UK. Its specialist portfolio includes hotels, student
accommodation, office buildings and sports stadiums.

 

TSL's operations in the South of England expand the Group's existing reach via
the recent acquisition of Group Topek Holdings Limited and further complement
the Group's presence in the cladding remediation market, in doing so creating
a full-service specialist cladding installation and remediation contracting
business with national presence for the Group.

 

In the 12 months to 31 August 2023, TSL generated audited revenue of £38.7m
and PBT of £8.1m.

 

It is expected that the Acquisition will be earnings accretive in the first
full year and the Acquisition marks another step in the continuing
diversification of Brickability since IPO.

 

Since joining the public markets in 2019 Brickability has now acquired 14
businesses, pursuing a diversified multi-business strategy to broaden and
deepen the Group's product portfolio and geographic coverage.

 

The consideration payable for the Acquisition comprises:

 

 ·      an initial cash consideration of £17.3m payable on completion,
 subject to final working capital adjustments to acquire the business on a
 cash-free, debt-free basis;
 ·      a further £10.0m satisfied through the issue of 17,094,017 new
 ordinary shares of in the capital of the Company (the "Consideration Shares")
 at an effective issue price of 58.5 pence per ordinary share; and
 ·      up to £20.7m of deferred contingent consideration that, subject
 to adjustments, is payable for performance against target performance criteria
 over the next three years.

 

The initial cash consideration for the Acquisition will be financed through
the Group's existing cash resources. The Consideration Shares will be subject
to a 24-month hard lock-in, subject to customary carve-outs, followed by a
12-month orderly market arrangement. The Consideration Shares represent
approximately 5.7 per cent. of the existing share capital.

 

Application has been made for the 17,094,017 Consideration Shares to be
admitted to trading on the AIM Market of the London Stock Exchange
("Admission"). The Consideration Shares will rank pari passu with the Group's
existing ordinary shares in issue, and it is expected that Admission will
occur at 8.00 a.m. on 23 January 2024. As a result Admission will occur, and
the Consideration Shares will be issued, prior to the ex-dividend date for the
previously announced recommended interim dividend of 1.07 pence per ordinary
share.

 

Following Admission, the Company will have 317,718,793 ordinary shares in
issue. This figure of 317,718,793 may be used by shareholders as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change of their interest in, the
Company under the FCA's Disclosure Guidance and Transparency Rules.

 

The Company also announces that it intends to provide a scheduled trading
update in respect of the year ended 31 March 2024, and in respect of outlook,
towards the end of February 2024.

 

 

John Richards, Chairman, Brickability, said:

 

"We are delighted to announce the acquisition of Topek Southern soon after the
Group's acquisition of Group Topek Holdings. In addition to further
diversifying the Group's product and revenue base, the Acquisition gives the
Group a truly national presence in the cladding market.

 

I, and the Brickability Group, welcome our new colleagues and look forward to
delivering value for all stakeholders."

 

 

Alan Simpson, CEO, Brickability, added:

 

"As previously reported, our Bricks and Building Materials division has seen
cladding products supply go from strength to strength. Topek Southern will sit
within the Group's Contracting Division alongside Group Topek Holdings and
will further strengthen the Group's national presence in the market across
cladding supply and installation as we continue to deliver upon the Group's
diversified multi-business strategy."

 

 

Dexter Copeland, Managing Director, TSL, commented:

 

"We are excited to be joining the Brickability Group and with it beginning a
new chapter in the history of the business. This is a great opportunity to
develop the business further as part of a larger organisation.

I look forward to working within the Group for the benefit of all
stakeholders."

 

 

ENDS

 

This announcement contains inside information.

 

For further information please contact:

 

 Brickability Group plc                                           via Montfort Communications

 John Richards, Chairman

 Alan Simpson, Chief Executive Officer

 Mike Gant, Chief Financial Officer

 Cavendish Capital Markets (Nominated Adviser and Broker)         +44 (0) 207 220 0500

 Ben Jeynes, George Lawson (Corporate Finance)

 Julian Morse, Michael Johnson, Charlie Combe (Sales & ECM)

 Montfort Communications                                           +44 (0) 203 514 0897

 James Olley                                                      brickability@montfort.london (mailto:brickability@montfort.london)

 Ella Henderson

 

About Brickability

Brickability is a leading construction materials distributor, serving
customers across the UK and Europe for over 37 years through its national and
local networks. The Group operates from more than 70 locations across the
country with over 700 employees.

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