Cladding contractor acquired at up to 5.6x EBITDA

South Wales-based construction materials distributor Brickability Group has acquired specialist cladding installation and remediation contractor Topek Holdings Limited in a deal that could rise to as much as £45 million.

Brickability will pay an initial cash consideration of £27.3 million upon completion of the deal, subject to final working capital adjustments, to acquire the firm on a cash-free, debt-free basis. There is also a deferred contingent consideration worth up to £17.7 million payable subject to adjustments for performance against target criteria over the three years post-acquisition.

If the full £45 million consideration is paid, it will reflect approximately a 5.6x multiple of Topek’s adjusted EBITDA of £8 million for the year ending August 31 2023, generated on unaudited revenue of £21.2 million.

Topek provides a range of services that will complement Brickability’s existing cladding portfolio, which includes Architectural Facades, SBS Cladding and Taylor Maxwell Cladding. As a result of the acquisition, Brickability now has a full range of cladding capabilities, covering design, fabrication, supply and installation, with the deal also significantly increasing its cladding remediation offering.

Topek is based in Scotland and was established in 1981. The company installs cladding and rainscreen systems to add to the visual appearance of buildings, comply with fire safety standards and improve insulation, serving a strong blue-chip client base.

Brickability Chief Executive Alan Simpson commented: "We've seen in our Bricks and Building Materials division how cladding products supply has gone from strength to strength. With Topek, which will sit in our Contracting division, we will be building on that and expanding our existing product and services range into supply and installation as we continue to pursue our diversified multi-business strategy.”

Topek Managing Director Douglas Bryce added: "We are excited to be joining the Brickability Group, adding our excellent product to their portfolio and allowing us the opportunity to provide our clients a broader offering of solutions. The team at Brickability has built a formidable operation and we look forward to working alongside them in exploring new opportunities."

In a trading update, Brickability has said its group revenue for H1 FY24 is expected to be around £324 million, down from £352.7 million a year earlier. The company’s board anticipates reporting adjusted EBITDA of at least £24 million for the six months to September 30 2023, in line with its expectations.

The acquisition of Topek is expected to be immediately earnings accretive in the current year, but forecast reductions in newbuild volumes are expected to impact the performance of Brickability’s existing businesses during the second half of the current financial year.


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