REG - Strix Group PLC - Proposed Disposal of Billi for £110.0 million

StrixAnnouncement

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RNS Number : 2064M  Strix Group PLC  19 December 2025

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 
19 December 2025

 

Strix Group Plc

 

("Strix", the "Group" or the "Company")

 

Proposed Disposal of Billi for £110.0 million

 

Strix Group Plc (AIM:KETL), the global leader in the design, manufacture and
supply of kettle safety controls and other components and devices involving
water heating and temperature control, steam management and water filtration,
today announces that Strix (UK) Limited and the Company have entered into a
conditional sale and purchase agreement with Birmingham Bidco Pty Ltd
("Bidco") (further details of which are set out further below under the
heading "Information on Bidco") for the disposal of the Billi business,
comprising Strix Australia Pty Ltd and each regional subsidiary (together,
"Billi"), for an aggregate consideration of £110.0 million on a cash free /
debt free basis and subject to customary post-completion adjustment (the
"Disposal"). The consideration will be paid in cash upon completion of the
Disposal ("Completion") and Completion is subject to shareholder approval that
will be sought at a General Meeting of the Company, further details of which
are set out below.

Background to, and reasons for, the Disposal

The transaction, which values Billi at an enterprise value of £110.0 million,
equates to 47.8 pence per share in the issued share capital of the Company
(which is c.18% higher than the current share price of 40.7 pence) and
provides an opportunity to crystalise a significant increase in value
creation. Strix acquired Billi, a leading provider of premium instant boiling,
chilled, and sparkling filtered water systems, in November 2022 for c.£38
million and therefore the Disposal reflects an absolute return of c.3x on
Strix's original investment. In November 2025, all debt relating to the
original acquisition of Billi was repaid.

As previously announced, the Group has encountered certain macroeconomic and
geopolitical headwinds, particularly within its Controls division, owing in
part to indirect tariff impacts and a weakening US dollar. This has led to
lower than anticipated trading, a weakened financial performance and an
increase in the Group's net debt leverage position.

In order to mitigate the impact of this, the Group has already initiated a
number of key actions to enhance working capital efficiency and maintain
careful control of operational and capital expenditure. In connection with
this, the Board has also been considering a number of more permanent strategic
options to help enhance the financial position of the Group.

Over the last three months, the Group has performed a significant
restructuring of planned production volumes in its China factory aimed at
reducing inventory on hand by c.£8.0 million over the last six months of the
financial period. The Group has also successfully put in place extended
non-recourse debt factoring in its Italian operations, bringing average debtor
balances down by c.£2.0 million. In addition, the Board decided to cancel the
final dividend proposed for FY24, which was due to be paid in December 2025,
to further support the Group's focus on reducing the net debt position.
Supplementing these direct actions, the business has continued to maintain
careful control of operational and capital expenditure.

The Company estimates that the Group's net debt balance at the expected
Completion date will be c.£68 million and therefore, to further accelerate
debt reduction in a material way and in recognition of the Company's current
market capitalisation, the Board believes that the Disposal represents the
optimal path to bring the Group back into a net cash position and remove
reliance on debt funding.

A strengthened balance sheet enables capital to be deployed for growth,
reduces interest costs and repositions the Group as a lower-risk equity
proposition going forward. It would also enable management to concentrate
resources on the Group's core operations, with capital being available for
selective reinvestment across both the Controls and Consumer Goods divisions.
These resources would have otherwise been allocated to debt reduction or
Billi's growth.

As announced in the Company's November 2025 trading update, Billi has
continued to deliver a strong performance, reporting double-digit growth rates
(at constant exchange rate), and progressing with its geographical rollout
strategy, gaining traction with new customers in key markets. In the 12 months
ending 31 December 2025, Billi is expected to generate revenue of c.£47
million and adjusted EBITDA of c.£10 million (under IFRS at a constant
exchange rate). Billi's recent performance reflects the significant progress
made under Strix's ownership, which includes the following:

·      Securing a new facility with higher capacity in Australia where
it can further ramp up production;

·      Opening a new flagship Billi showroom and event space in
Farringdon;

·      Strengthening the Billi management team through strategic hires;

·      Rebuilding the service capability as evidenced in Trustpilot
scores;

·      Leveraging new product development and expanding distribution in
both residential and commercial markets; and

·    Significantly expanding UK operations, which would act as a gateway
for European expansion - with a number of distributor contracts in Europe
already secured.

Billi now has a strong platform upon which to execute its longer-term
strategy, however, it will require further investment that, in the absence of
the Disposal, the Group would be slower to provide due to its accelerated debt
reduction programme. There is a risk that with slower investment, growth rates
within Billi may reduce, and the Board therefore believes that, at the price
agreed with Bidco for Billi, now is the optimal time to dispose of Billi and
crystalise attractive returns for shareholders.

In connection with the Disposal, the Company has agreed a memorandum of
understanding with Billi under which the Group will, assuming the Disposal is
completed, look to negotiate a manufacturing and development agreement, and
provide engineering and research and development support to Billi. This is
expected to result in a longer-term manufacturing partnership and therefore
access to a financial benefit from Billi's growth under new ownership.

Information on Bidco

Birmingham Bidco Pty Ltd (ACN 693 770 811) is a new Australian company
incorporated by the manager ("Crescent Capital Partners") of the private
equity fund known as "Crescent Capital Partners VII" for the purposes of the
Disposal. Crescent Capital Partners is a Sydney-based private equity and
alternative asset management firm founded in 2000, primarily investing in
mid-market companies in Australia and New Zealand across sectors such as
healthcare, industrials and services.

Future strategy

Despite the recent macroeconomic headwinds, the Board believes that the Group
will continue to deliver a stable and highly cash-generative performance,
underpinned by strong OEM relationships, market-leading positioning and
high-quality service capabilities. This dependable underlying cash flow,
combined with the anticipated reduced leverage profile and the further
investment of the cash proceeds from the Disposal, will enable continued
investment in intellectual property and innovation as well as the ability to
return to paying dividends in due course.

Whilst it will take some time to finesse the Group's post-Disposal strategy,
in the short-term, the Group will continue to focus on the following strategic
pillars:

 ·             Expanding the Controls addressable market beyond kettles, through the Low-Cost
               control strategy as well as the filtration product range to grow share in the
               consumer and OEM markets
 ·             Accelerating development of new heating and safety control technologies and
               applications for existing OEM and Brand customers
 ·             Focusing the LAICA branded consumer goods strategy combining filtration
               intellectual property and manufacturing capability with a select range of
               sourced products ('Wellbeing at Home')
 ·             Adapting the kettle Controls product, pricing and sales strategy to latest
               market conditions
 ·             Simplifying how the Group operates, rightsizing the business to match demand
               and streamlining spending to invest in growth
 ·             Defending market share through increasing action against copyist activity,
               with a particular focus on the US market, and increasing the available
               resource to pursue such actions, combining efforts from Controls and Consumer
               Goods who serve the same SDA end market
 ·             Strengthening commercial activities to leverage design and manufacturing
               services, filtration and appliance IP/know-how
 ·             Value-added services (Industrial Design, Applications Engineering, Customer
               Service) to be offered to maintain a sustainable price premium

 

Further guidance on the Group's strategic direction will be given at the time
of the FY26 results.

Proposed use of proceeds of the Disposal

Completion of the Disposal will provide the Company with the opportunity to
use the Disposal proceeds (net of transaction costs associated with the
Disposal), which are expected to be approximately £107 million, to reduce the
ongoing cost structure of the Group.

Given the recent focus on debt reduction, the Company will repay its existing
debt facility in full to provide the Group with a robust balance sheet for the
next stage of its journey. Going forward, the Group plans to retain a reduced
debt facility which is more appropriate for its future strategy. It is also
anticipated that a proportion of the proceeds from the Disposal will be
returned to shareholders as soon as possible after Completion, with the
Company intending to launch a £10 million share buyback programme. The Board
is in active consultation with shareholders regarding ways of efficiently
returning further capital to shareholders. The Board will provide an update to
shareholders at the time of the Group's FY26 results announcement regarding
the remaining capital return. Some of the proceeds will be retained by the
Group and used to make investments into strategic growth initiatives and for
working capital purposes.

Shareholder circular

The size of the consideration payable in respect of the Disposal relative to
the Group constitutes a fundamental change of business pursuant to Rule 15 of
the AIM Rules and completion of the Disposal is therefore subject to
shareholder approval. The Company will shortly issue a circular to
shareholders containing further details on the Disposal, which will
incorporate a notice convening a General Meeting of the Company to be held on
8 January 2026. At the General Meeting, an ordinary resolution will be
proposed to approve the Disposal (the "Resolution").

The expected timetable of events is as follows:

 Publication of Circular      19 December 2025
 General Meeting             8 January 2026
 Completion of the Disposal  30 January 2026

Recommendation and letters of intent

The Board, having consulted with its joint financial advisers being Zeus
Capital Limited and Stifel Nicolaus Europe Limited, considers the Disposal to
be in the best interests of the Company and its shareholders as a whole.
Accordingly, the Board recommends that shareholders vote in favour of the
Resolution, as those Directors who hold ordinary shares of £0.01 each
("Ordinary Shares") in the Company intend to do in respect of their own
aggregate beneficial holdings of 3,291,314 Ordinary Shares, representing
c.1.4%n of the Ordinary Shares in issue at the date of this announcement.

In addition, the Board has consulted with certain shareholders regarding the
Disposal and shareholders holding a total of 43,939,316 Ordinary Shares, and
representing, in aggregate, c.19.1% of the Company's issued share capital have
provided letters of intent to vote in favour of the Resolution to be proposed
at the General Meeting. A number of shareholders have verbally provided their
support, but were unable to provide a letter of intent in advance of this
announcement being published. The level of support received through the
consultation process with the Company's major shareholders has confirmed the
Board's view that the Disposal is in the best interests of shareholders.

Mark Bartlett, CEO of Strix, said: "The disposal of Billi represents a
transformational milestone for Strix and a clear demonstration of our
disciplined approach to capital allocation and value creation. Over the three
years that Billi has been part of the Group, we have successfully enhanced its
operational performance and strategic positioning, delivering an absolute
return of c.3x on the original investment made in 2022.

The proceeds from the disposal will significantly strengthen Strix's balance
sheet, enabling the Company to eliminate its net debt and materially improve
financial flexibility. This represents a pivotal step in reinforcing the
long-term resilience and financial health of the Group, allowing us to invest
with confidence in our core business and support future growth initiatives.

Looking ahead, our focus remains firmly on sustaining our market-leading
position across heating, safety and filtration technologies, while continuing
to deliver the highest standards of service to our customers. Above all, Strix
remains focused on creating sustainable, long-term value for shareholders,
which sits at the very heart of our strategy."

 

For further enquiries, please contact:

 

 Strix Group Plc                                                            +44 (0) 1624 829829
 Gary Lamb, Chairman

 Mark Bartlett, CEO

 Clare Foster, CFO

 Zeus (Nominated Advisor, Joint Financial Adviser and Joint Broker)         +44 (0) 20 3829 5000
 Jordan Warburton / Louisa Waddell (Investment Banking)

 Dominic King (Corporate Broking)

 Stifel Nicolaus Europe Limited (Joint Financial Adviser and Joint Broker)  +44 (0) 20 7710 7600
 Matthew Blawat / Phillip McCreanor

 Gracechurch Group (Financial PR and IR)                                    +44 (0) 204 582 3500
 Heather Armstrong / Claire Norbury

 

The information contained within this announcement is considered by Strix to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No.596/2014 (as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018). On the publication of this announcement
via a Regulatory Information Service, such information is now considered to be
in the public domain.

 

The person responsible for arranging release of this announcement on behalf of
the Company is Mark Bartlett, Chief Executive Officer.

 

Information on Strix

 

Founded in 1982, Isle of Man based Strix is a global leader in the design,
manufacture and supply of kettle safety controls and other components and
devices involving water heating and temperature control, steam management and
water filtration.

 

Strix has built up market leading capability and know-how, expanding into
complementary products and technologies. The Group's brands include Aqua
Optima, LAICA and Billi providing our customers with market leading water
solutions on a global basis.

 

Strix is quoted on the AIM Market of the London Stock Exchange (AIM: KETL).

 

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