Volution Group plc Acquires Simx Limited
Volution Group plc, a leading supplier of ventilation products to the residential and commercial construction markets, is pleased to announce that it has acquired Simx Limited ("Simx") for an all cash consideration of NZ$72.0 million (approximately £37.8 million). Simx is the leading designer, manufacturer and supplier of primarily residential ventilation products to the New Zealand heating, ventilation and air-conditioning market. It is headquartered in Auckland, New Zealand, with an additional distribution centre in Christchurch, New Zealand.
Strategic and Financial Overview
Simx was established in 1983 and has been a customer of Volution for over 20 years. It has developed into the leading residential ventilation product provider in the New Zealand market and we are excited about integrating the company into the Group and further developing its product portfolio. A significant part of Simx's revenue in the financial year ended 30 June 2017 was third party sourced fans sold under the Group's Manrose brand. Simx also sells a number of its own market leading brands including SmartVent, Heat Trans and Simx.
The acquisition of Simx is in line with the Group's strategy to grow by selectively acquiring value-adding businesses in new markets and geographies across the residential ventilation market and, where appropriate, in the commercial ventilation market.
The acquisition was on a debt free, cash free basis for an all cash consideration of NZ$72.0 million (approximately £37.8 million), funded from the Group's existing cash and banking facilities. During the financial year ended 30 June 2017, Simx generated revenue of NZ$36.6 million (approximately £19.2 million). Reported profit before tax was NZ$4.6 million (approximately £2.4 million) and reported profit before interest and tax was NZ$6.1 million (approximately £3.2 million). Simx's gross assets were NZ$25.3 million (approximately £13.3 million) as at 30 June 2017.
Volution expects the acquisition to be immediately earnings enhancing in the year ending 31 July 2018 and will be reported under Volution's Ventilation Group division.
The three Executive Directors, who were also the shareholders, together with the sole Non-Executive Director on the board, stepped down from their roles on completion of the transaction and have left the business. As part of this transaction, Ian Borley, who has been General Manager at Simx since 2009, has been appointed Managing Director. Lee Nurse, who has been with Volution for 9 years and is currently the Group Product & Marketing Director, will assist with the integration of Simx into the Group.
The combination of Ian Borley's knowledge and experience, supported by the strong existing operational management team, together with Lee Nurse's wider understanding of the Group and his involvement with integrating previous acquisitions, creates the right management platform to underpin our ambitious plans for further growth of the business.
Commenting on the acquisition, Ronnie George, Chief Executive Officer of Volution, said:
"We are delighted to have reached agreement to acquire Simx, a trading partner of Volution for over 20 years and one of the first overseas partners that I met when I joined Volution in 2008. In that time, it has developed into the leading residential ventilation product provider in the New Zealand market. This acquisition is consistent with our stated strategy of making selective value enhancing acquisitions in new markets where a business has a leading market position. We are excited about further developing Simx, in particular, by introducing more energy efficient and aesthetically more attractive products to their portfolio, and we believe the acquisition will deliver an attractive return for our shareholders."