LONDON, UK: Lords Group Trading Plc has acquired Chiltern Timber Supplies Limited for a total consideration of up to £1.65 million on a net cash free/debt free basis.
The acquisition is in line with the Group’s stated IPO strategy, due to its complementary geographic position to the Group’s existing Merchanting branches, offering product range extension and is expected to result in EBITDA margin expansion for Lords.
Established in 2013, Chiltern Timber is an independent timber merchant operating from a modern single site in Hemel Hempstead, Hertfordshire.
The business specialises in providing hardwoods, special timber sections, timber landscaping products and veneered sheet material. The business also operates a modern milling facility, allowing it to offer a differentiated service to that of its competitors.
The Group believes that there is strong growth potential and synergies achievable from Chiltern Timber operating within the Lords business, given the ability for it to cross sell into the existing Lords customer base, improving the existing traditional merchant offering as well as through the provision of overhead optimisation. The Acquisition is expected to be earning accretive from completion and achieve a strong return on capital employed.
For year ended 31 December 2022, Chiltern Timber delivered £2.6 million of revenue and £0.25 million of EBITDA. The total consideration for Chiltern Timber is up to £1.65 million in cash on a net cash free / debt free basis, and is to be funded from the Group’s existing facilities.
The consideration payable is £1.175 million on signing and up to a further £0.475 million deferred equally over 12, 24 and 36 months on a contingent basis subject to Chiltern Timber delivering certain earnings targets.
Shanker Patel, Chief Executive Officer of Lords, said: “We are delighted to announce the successful acquisition of Chiltern Timber and are also really excited to welcome their ten colleagues to the Lords Group family. The acquisition is complementary to our existing Lords Builders Merchants business and will increase our customer base, broaden our product offering and enhance our UK geographic coverage.”
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