Trifast (TR) has bought Precision Technology Supplies - probably the UK's second largest stainless steel fastener distributor - for an initial cash consideration of £8.5 million, subject to adjustment based on the net cash in the business at completion, with contingent cash consideration of up to £2.5 million.
Building Trifast Group's presence in the stainless steel market, PTS' management team and previous owners Jason Collyer, Andy Edwards and Andy Knight will continue to run the business on a day-to-day basis, alongside the current PTS operations management team and wider staff base.
For year end 31 March 2017, PTS reported revenue of £5.11 million and profit before tax of £0.72 million. Gross assets at that date were £3.62 million.
"We believe that this acquisition will be earnings enhancing in the financial year-ending 31 March 2019," Trifast CEO Mark Belton. "It will enable us to provide an enhanced offering across our customer network and also strengthen our position when it comes to purchasing synergies and logistics.
"PTS will run as a stand-alone business within the TR family of businesses - however it will, like other brands within the TR portfolio, significantly benefit from the Group's marketing and global sales services which will open-up international markets and access to TR's wider customer network. We anticipate that within the enlarged Group, PTS will be very well placed to drive further sales growth over the coming years.
"Having got to know PTS well, we can see that their additional skills, customers and end markets will further strengthen our profile within the stainless steel market. Building on our product offering and our technical expertise will serve us well as we continue to roll out our strategy for growth."
Deal background
TR said it has experienced growing demand for stainless steel fastenings from a number of its global OEM customers. Adding the PTS product portfolio will widen its global stock range to enhance our customer offering and provide further support its distributor sales (currently c.10% of Group revenue).
The statement added: "Stainless steel fasteners are increasingly being specified across a range of our core sectors, as they offer an environmentally friendly solution which is fully recyclable, high strength and corrosion resistant. Therefore, the opportunity to expand our knowledge base and acquire highly skilled and experienced people in this key area of the market provides an exciting proposition and a foundation to further growth.
"Trifast will be working closely with PTS management to unlock supply chain opportunities. Initially focusing on the Group's existing supply requirements and, in the longer term, to support product range extensions across our global business. The combined spend of both companies will provide purchasing leverage and is expected to lead to margin enhancement in the future."
"Now possible to achieve significant growth"
PTS MD Jason Collyer said: "Having known the team at TR for many years, we see joining them as a great opportunity for everyone at PTS. My team and I are looking forward to working as part of this industry respected business - we recognise that the strategy and the resources now open to us make it possible to achieve significant growth beyond what was achievable as an independent business."
Malcolm Diamond MBE, Chairman at Trifast added: "As a Board, we are delighted to add this successful business to the Group's portfolio. There is a strong cultural fit between PTS and TR; PTS commands a respected market position in stainless steel fasteners and the operational team bring with them excellent in-depth product and supply chain knowledge - between them they have over 90 years industry experience."
"On behalf of everyone at TR and all our stakeholders, we welcome the PTS team on board and we look forward to working with them and delivering the many opportunities this partnership will bring over the coming years."
