Brickability acquires Topek Southern in £48m deal

Brickability Group announced the completed acquisition of Topek Southern (TSL) up to £48m on Monday.

The AIM-traded firm said the acquisition would involve the purchase of the entire issued share capital, business, and operations of TSL Assets.

It said TSL, based in Hampshire and founded in 2009, specialises in providing façade systems, fire remediation, roofing, and curtain wall solutions, catering to both live and occupied construction sites.

The company also acts as a principal contractor for various commercial and industrial projects throughout the UK, with a focus on areas like hotels, student accommodation, office buildings, and sports stadiums.

Brickability said the acquisition would strengthen its presence in the South of England, complementing its recent acquisition of Group Topek.

Additionally, it would enhance its position in the cladding remediation market, consolidating its status as a full-service specialist cladding installation and remediation contracting business with a national reach.

In the financial year ended 31 August, TSL achieved audited revenue of £38.7m and a profit before tax of £8.1m.

The acquisition was expected to be earnings accretive within the first full year.

Consideration included an initial cash payment of £17.3m, subject to final working capital adjustments.

Additionally, £10m would be satisfied through the issue of 17,094,017 new shares of Brickability at an effective issue price of 58.5p each.

Up to £20.7m of deferred contingent consideration, subject to performance against specific criteria over the next three years, would complete the consideration structure.

Brickability said it was funding the initial cash consideration from its existing cash resources.

The consideration shares would be subject to a 24-month hard lock-in, with customary carve-outs, followed by a 12-month orderly market arrangement.

It said the shares would constitute 5.7% of its existing share capital.

“We are delighted to announce the acquisition of Topek Southern soon after the group's acquisition of Group Topek Holdings,” said chairman John Richards.

“In addition to further diversifying the group's product and revenue base, the Acquisition gives the group a truly national presence in the cladding market.

“I, and the Brickability Group, welcome our new colleagues and look forward to delivering value for all stakeholders.”

Brickability said it would provide a scheduled trading update for the financial year ending on 31 March, as well as its outlook, towards the end of February.

At 1145 GMT, shares in Brickability Group were up 7.14% at 60p.

Reporting by Josh White for Sharecast.com.