Builders merchant group Lords has extended its reach northwards with the acquisition of independent builders merchant A W Lumb.
The total consideration is £23.1 million, payable in cash, consisting of £19.5 million due on completion and deferred consideration of £3.6 million payable in equal annual instalments over the next five years. It will be funded from Lords’ existing cash resources and debt facilities.
The key senior management from A.W. Lumb and its 77 employees will be joining the Lords Group, ensuring continuity of local knowledge and customer relationships, as well as continuing the family values core to Lords’ success.
Established in 1964 and family owned until a management buyout in 2017, A.W. Lumb is a leading independent builders merchant operating in the North of England from depots in Dewsbury and Tamworth. It has a general merchanting service, with offerings in building materials, garden landscaping, timber & joinery and roofing products. The business also provides a specialist offering in drylining and insulation to housebuilders.
It has long been at the top of the BMJ Trailblazers League Tables for Sales & Profitabilty per head.
Shanker Patel, Chief Executive Officer of Lords, said: “This acquisition delivers against our strategy of gaining market share through geographic expansion and product range extension. Specifically, it gives Lords broader reach in the North of the country. A.W. Lumb is highly regarded in its local markets, respected for its product expertise and superior service levels and we are delighted to welcome their 77 colleagues and senior management to our team, who we believe share the same values as Lords.
“Furthermore, this acquisition is a major milestone in our growth and supports our stated ambition to reach £500 million revenue by 2024.”
In the year to 30 June 2021, AWLC generated revenues of £43.3 million, EBITDA of £3.9 million and a profit before tax of £3.8 million. As at 30 June 2021 AWCL had pro forma net assets of £10.1 million, £1.9 million of pro forma net cash and freehold property with a market value of £4.6 million.
Alongside the acquisition is an increase in the Lords Group revolving credit facility from £30.0 million to £50.0 million. HSBC has also agreed to increase the Group’s invoice discounting facility from £10.0 million to £20.0 million. It will help Lords to take advantage of further acquisition opportunities.