Flowtech Fluidpower pays nearly £2m for Hi-Power group

Specialist technical fluid power products supplier Flowtech Fluidpower announced the acquisition of Hi-Power, as well as the business and certain assets of Hi-Power Hydraulics on Friday.

The AIM-traded firm described the combined acquisition as being a distributor of hydraulic equipment components, and systems design and build, predominantly to the mobile and transport sectors.

Hi-Power was founded 40 years ago, and reportedly holds a “market leading position” in the Republic of Ireland.

It has a number of long-term customer relationships across its Republic of Ireland and Northern Ireland operations, employing a total of 38 people across its sites in Cork, Dublin, Belfast and Manchester.

Flowtech said the acquisition provided “another complementary business” to the group's PMC division, delivering incremental revenue through a wider customer channel and extending its position with “important European suppliers”, further boosting the divisional offer.

In Ireland, the company said Hi-Power would operate as an independent sister company within the PMC division and would continue to be managed by the current Hi-Power executive management team who had been in place for “a number of years”.

The UK operation, Hi-Power Hydraulics, would become a trading division of Primary Fluid Power and would report to its managing director, Paul McGrady.

“This acquisition represents a further strengthening of the group offering to the hydraulics marketplace, delivering a greater depth of technical expertise along with a strengthening of our core product set,” said chief executive Sean Fennon.

“We continue to work on a number of other opportunities which we fully expect, over the coming months, to reach positive conclusions on.

“As we have previously stated, our targeted approach ensures we can achieve both a concentration and enhancement to our product set which is, and will continue to be, core to our business model.”

For the year ended 31 December 2016, Hi-Power achieved sales of £6.9m, producing EBIT of £0.4m.

Net assets - excluding net cash and property - on the same date were £1.9m.

As well as some immediate back office savings, the group said it expected to deliver “synergy opportunities” over the medium term through coordinated operational activities, particularly in Dublin and Manchester, as well as wider commercial opportunities through collaboration with the division's other Irish operation, Nelson Hydraulics.

The acquisition completed on 22 June, and was being funded from the company's own resources, comprising £1.9m on completion with additional payments expected to be around £0.5m, subject to an earn-out over the 18 month period to 31 December 2018.

Flowtech said the maximum consideration payable was £3.5m.