Hill & Smith acquires WAPCO in $42m deal

Infrastructure products and galvanising services provider Hill & Smith Holdings has completed the acquisition of the business and assets of Work Area Protection Corporation and its associated affiliates for a total cash consideration of $42.0m, on a debt free, cash free basis, it announced on Wednesday.

The FTSE 250 firm said the consideration paid represented a multiple of 8.7 times average adjusted EBITDA of the preceding two financial years, and would be funded from the Group's existing bank facilities.

It said WAPCO, based in Illinois and Texas, was a business of New Enterprise Stone & Lime Company, and specialises in the development, manufacture, and distribution of a wide range of road work zone safety products, including crash attenuators, temporary variable message signs, smart work zone systems and traffic control products such as drums, channelizers and cones.

Representative of ongoing trading, in the two years ended 28 February, WAPCO recorded average revenue of $47.7m and adjusted EBITDA of $4.8m.

The acquisition was expected to be earnings-enhancing to Hill & Smith in the first full financial year following the acquisition.

Hill & Smith’s board said the combination of WAPCO's business with its existing US and international roads businesses would increase the scale and range of road safety products supplied into key geographies, where the infrastructure investment outlook was strong.

“WAPCO offers a wide range of innovative solutions for the traffic safety and highway infrastructure markets, and its excellent reputation for high quality products and service delivery is well-deserved,” said Hill & Smith CEO Derek Muir.

“The acquisition provides Hill & Smith with a strong platform to accelerate the expansion of both our existing US and international road businesses and we are excited to welcome WAPCO and its employees to the group.”