Diploma buys St Albans-based FS Cables for £18m

Diploma has announced the acquisition of St Albans-based FS Cables for £18m in cash, in a deal that is expected to be immediately earnings-enhancing.

FS Cables, which comprises Caplink Limited and FSC Global Limited, provides essential specialist electrical, data and communications cable products and solutions to a broad base of mostly UK-based customers.

The business supplies cable products to installers, end-users and wholesalers for a range of industries including electrical contracting, home automation and building management, rail, marine and telecommunications. It mostly supplies own-branded products sourced from a portfolio of long-standing suppliers, but also sources some products from branded manufacturers.

Diploma will pay an initial cash consideration on completion of £17m, before acquisition costs, which will be met from existing cash resources. There is also be a deferred consideration up to a maximum £1m payable based on aggregate earnings before interest and tax achieved in the year to the end of October 2018.

For the year to 31 October 2017, unaudited statements from Caplink Limited and FSC Global showed aggregate pre-tax profit of £2.7m on aggregated revenues of £15.4m.