REG - Stelrad Group PLC - Acquisition of DL Radiators srl

StelradAnnouncement

23/06/2022 07:00

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RNS Number : 8737P  Stelrad Group PLC  23 June 2022

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

23 June 2022

STELRAD GROUP PLC

("Stelrad" or "the Group")

 

Acquisition of DL Radiators srl

 

Stelrad to acquire DL Radiators, expanding product range and geographical
presence

 

Stelrad, a leading specialist manufacturer and distributor of radiators in the
UK, Europe and Turkey, today announces it has entered into an agreement with
De Longhi Industrial S.A to acquire 100% of the share capital of DL Radiators
srl ("DL Radiators") for €28.346 million on a debt free, cash free basis. DL
Radiators is a leading Italian heat emitter manufacturer which produces and
sells both hydronic and electric radiators into the domestic heating market.

 

DL Radiators' main manufacturing site is located in Moimacco, near Udine,
Italy and employs approximately 350 people. Its product range includes steel
panel, multicolumn steel, aluminium and towel warmer radiators, providing
customers with flexible heat emitter solutions suitable for a wide variety of
installations.

 

Stelrad's acquisition of DL Radiators extends the range of radiators available
to its existing sales and distribution network, expands its routes to market,
provides a well established complementary brand and increases its
manufacturing capacity. These criteria are aligned with the acquisition policy
and strategy stated at the time of the Group's admission to the London Stock
Exchange in 2021.

 

DL Radiators generated €86.9 million revenue and €5.0 million normalised
EBITDA for its financial year ended December 2021(1), with gross assets at 31
December 2021 of €62.9 million.

 

Upon closing, Stelrad will pay a cash consideration of €28.346 million
based on a debt free, cash free enterprise value of six times normalised
EBITDA. The transaction will be funded from existing facilities including
temporary use of a £20 million accordion option. Leverage is expected to
return to comfortably below 1.5x EBITDA by the year end. The Group expects the
acquisition to be earnings enhancing in the current financial year with double
digit EPS enhancement in future years.

 

DL Radiators' experienced management team, led by CEO Stefano Valente, will
continue to run the business with oversight from Stelrad, and the transaction
is anticipated to close in the coming weeks, following satisfaction of
conditions precedent. The Group intends to provide further detail on DL
Radiators at the Group's interim results on 12 August 2022.

 

(1) Reported EBITDA per the 2021 financial statements was €5.071 million

 

 

 

Trevor Harvey, CEO of Stelrad, said:

 

"This is a compelling transaction for Stelrad and allows us to grow our
business through the provision of additional products and through geographical
expansion. DL Radiators has strong brands with a significant customer base and
we look forward to working with the team to realise value opportunities and
expand the market for their higher value product ranges.

 

"Following completion of this transaction, Stelrad will be a market leader in
six countries and hold a top 3 position in five more. We will continue to
develop our mainland European relationships with the long-established regional
distribution players in those territories, ensuring we continue to adapt to
evolving routes to market."

 

Stefano Valente, CEO of DL Radiators, added:

 

"We firmly believe that the success of a company is built on the commitment of
people who are passionate about their work and who can open up to the world
and creatively contribute to its improvement. We see this as a shared value
with Stelrad's experienced team from the management through to sales and
operations and we are excited to work alongside them to grow DL Radiators as a
leading heat emitter manufacturer.

 

"The mission of DL Radiators is the creation of heating products fit for the
future, which are able to improve not only the comfort of the rooms but the
quality of everyday life, combining intuitive technological capabilities with
Italian attention to design. Our partnership with Stelrad allows us to
continue to fulfil this mission to provide a best-in-class offering."

 

The acquisition constitutes a class 2 transaction, and this announcement has
been made pursuant of Chapter 10 of the UK Financial Conduct Authority's
Listing Rules.

 

- Ends -

ENQUIRIES

 

 Stelrad Radiator Group                      +44 (0)191 261 3301

 Trevor Harvey, Chief Executive Officer

 George Letham, Chief Financial Officer

 Investec Bank plc (Sole Corporate Broker)   +44 (0)20 7597 5970

 Bruce Garrow

 Ben Griffiths

 Powerscourt (Media Relations)               +44 (0)7855 432 699

 James White                                 stelrad@powerscourt-group.com (mailto:stelrad@powerscourt-group.com)

 Genevieve Ryan

 

 

 

 

 

 

 

 

 

 

Notes to Editors

 

About Stelrad

 

Stelrad Group plc is a leading specialist manufacturer and distributor of
steel panel radiators in the UK, Europe and Turkey, selling an extensive range
of standard and premium steel panel radiators, low surface temperature (LST)
radiators, towel warmers, decorative steel tubular radiators and other steel
"column" radiators to more than 500 customers annually.

 

The Group has four core brands: Stelrad, Henrad, Hudevad and Termo Teknik,
which had approximately 16.6 per cent. share by volume of total markets in the
UK, Europe, and Turkey in 2020, including 50.2 per cent. market share in the
UK. In 2020, the Group held top 3 share positions in 11 countries and was #1
in the UK, Ireland, the Netherlands, Belgium and Denmark.

 

It is headquartered in Newcastle upon Tyne in the United Kingdom with
manufacturing and distribution facilities at Mexborough in the UK, Nuth in the
Netherlands and Çorlu in Turkey, employing 1,326 employees across the
business, during 2021.

 

The origins of the Group date back to the 1930s and, today, Stelrad enjoys
long established commercial relationships with many of its customers, having
served each of its top five customers for over twenty years.

 

Further information can be found at: https://stelradplc.com/
(https://stelradplc.com/)

 

About DL Radiators

 

DL Radiators is a company of the De Longhi Industrial group known worldwide as
a leading Italian manufacturer of heating and home comfort products.

 

Passionate high-level professionalism, investments, organisational skills,
advanced technologies, Italian creativity and a focus on market expectations
are all constituent elements of DL Radiators' thirty-year experience for the
manufacturing of leading-edge products.

 

Faithful to its mission of favouring innovation, DL Radiators offers radiators
that combine functionality and aesthetics for designer radiator consumers,
installers and architects.

Further information can be found at:
http://www.dlradiators.com/dlradiators/en/
(http://www.dlradiators.com/dlradiators/en/)

 

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