LONDON: Van Elle Holdings has acquired 100% of the share capital of ScrewFast Foundations Limited, an innovative helical piling and steel modular foundations company for a maximum consideration of £3.68 million.

An initial consideration of £1.76m is payable in cash on completion, with up to a further £1.92m of deferred and performance-based cash consideration payable in August 2023.

Strategic rationale for the Acquisition

The Board of Van Elle believes that ScrewFast is an attractive addition to the Group as customers increasingly seek faster, modular forms of construction. It is profitable, cash generative, and operates in complementary market sectors with strong growth potential in each.

ScrewFast is highly regarded by its clients and by Van Elle, with both companies having worked alongside one another on Smart Motorways projects for several years.

ScrewFast has patented designs and a proven track record of installations spanning over 20 years. Its specialist system allows the installation of steel helical piles without the requirement for heavy piling equipment or in-situ concrete works and the immediate installation of modular foundation structures which are built offsite and connected through proprietary and proven designs, ready to receive the superstructure.

The end-to-end process significantly speeds-up the construction process, requires less attendant infrastructure to be provided by the main contractor and reduces on-site labour compared to traditional construction designs. The principles are similar to the Group’s pre-cast concrete Smartfoot modular foundation system.

ScrewFast will benefit from the scale, broad capabilities and financial strength of the Group, which will facilitate an immediate increase in capacity and access to additional cross-selling and growth opportunities.

The Group will retain the ScrewFast brand and will position the business within its Specialist Piling division, taking advantage of the synergies of shared administrative, commercial and operational resources in the division and the wider Group.

Complementary specialist piling services in high growth markets

In addition to its core existing highways market, ScrewFast operates in the power, telecoms and wider civils markets providing highly engineered and faster, modular foundation systems that permit immediate follow-on superstructure works.

As a result of the Acquisition, Van Elle anticipates increasing its market share in highways and entering the power and telecoms markets more consistently. Within the rail sector the Group is already well positioned for growth opportunities in Network Rail electrification and signalling programmes and will be able to add the ScrewFast system to its existing array of specialist foundation solutions and equipment.

The Group also anticipates the opportunity to develop helical piling and steel foundation systems in the modular housing market to suit lower superstructure loadings, complementing its existing pre-cast concrete Smartfoot system.

Acquisition consideration

ScrewFast is being acquired for an initial cash consideration of £1.76m, funded from existing cash resources. In addition, a deferred consideration of £0.74m together with a contingent cash consideration of up to £1.18m (subject to certain performance criteria being achieved) are both payable in cash in August 2023.

Allowing for a period of integration the Acquisition is expected to be modestly earnings enhancing during the first full year of operation within the Group. There is an expectation of some initial working capital support required to deliver contracts in the order book.

Capital expenditure required in the short term is expected to be minimal and its recent trading performance has delivered a return on capital employed at the upper end of Van Elle’s medium-term strategic targets.

Mark Cutler, Chief Executive Officer, Van Elle commented: “This is a very exciting, complementary acquisition focussed on our higher margin, specialist piling activities which strengthens our leading position in growth markets such as highways and rail.

ScrewFast has an established client base and proven track record of highly specialist services and will support the Group in the delivery of its medium-term strategic objectives. The two businesses have a similar culture and ethos which is very important to us, and we look forward to working with the ScrewFast team as we welcome them into the Group.

We continue to be encouraged by the Group’s progress, with expectations for the year unchanged from those set out in January. Whilst we remain cautious, given that the recovery in some of our markets is still at an early stage, we are very confident that the Group is well positioned to benefit from the continued execution of our growth strategy.”

Dan Dye, Managing Director, ScrewFast added: “We have long identified Van Elle as the ideal owner to support our growth potential. ScrewFast is an innovative and specialist business that fits well both culturally and technically into the diverse range of end-to-end services and market prospects offered by Van Elle, who we have worked alongside on several recent projects. My whole team is very excited by the opportunities ahead.”

Van Elle Holdings is the UK’s largest specialist geotechnical engineering contractor. The Company provides a range of ground engineering techniques and services including – ground investigation, general and specialist piling, rail geotechnical engineering, modular foundations, and ground improvement and stabilisation services. https://www.van-elle.co.uk