Franchise Brands has agreed to acquire the owner of Pirtek Europe in a deal worth over £200m.
The Macclesfield-headquartered franchise business is to buy Hydraulic Authority I Ltd, which is behind the provider of on-site hydraulic hose replacement and associated services, for a a consideration of £200m and £12.2m for cash, debt and working capital adjustments.
The deal and working capital requirements of Pirtek are to be funded by new bank debt facilities of £110m as well as a minimum of £110m in equity issued by Franchise Brands.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
The equity issue will include shares up to £18.85m, a subscription with Pirtek management and employees of approximately £4.8m and a placing to raise at least £90m.
Pirtek Europe has 213 service centres and 838 vans and is headquartered in London.
In 2022, its adjusted pre-tax profits totalled £14m, up from £10.5m, while its revenue increased from £40.1m to £49.2m.
The business currently operates in eight European countries and Franchise Brands said all members of Pirtek's senior management team are expected to remain in their posts.
Franchise Brands added that the forecast revenue of the enlarged group is £155m for 2023 and £182m for 2024.
Franchise Brands executive chairman Stephen Hemsley said: "We are delighted to announce the proposed transformational acquisition of Pirtek Europe, a high quality provider of mission-critical, emergency response on-site hydraulic hose replacement and associated services.
"The acquisition brings an established business of scale with an attractive financial profile and growth prospects and significantly expands the group's range of B2B services, customer base and end markets.
"Building on the strong performance of the group's acquisition of Filta in March 2022, which brought an international footprint in North America and Europe, Pirtek Europe extends the group's European presence across several key countries, providing a platform from which to launch the group's existing brands.
"By expanding the group's operations to ten countries, the acquisition will significantly advance the board's aim to create a market leading international B2B multi-brand franchisor that generates its income equally from the UK, North America and continental Europe.
"We look forward to working with Pirtek Europe's strong management team to accelerate growth and drive operational leverage across the combined business."
READ MORE:
