Polypipe buys Permavoid for up to £16.5m

Polypipe announced the acquisition on Monday of surface water management solutions supplier and designer Permavoid for up to £16.5m, in a deal that is expected to be earnings enhancing in its first full year after completion.

There will be an initial consideration of £4m on a debt and cash free basis and a further deferred consideration of up to £12.5m depending on Permavoid's EBITDA performance in the two years to 30 September 2020.

Polypipe said Permavoid's products are uniquely placed to deal with urban water management challenges which are increasing due to the impacts of climate change and urbanisation. The company's core technology is a patented plastic sub-base replacement system containing innovative capillary cones capable of storing surface water, to prevent flooding, while passively wicking the stored water to irrigate soils and substrates above.

Polypipe currently manufactures and sells Permavoid's products under exclusive licence for the UK and Irish markets. Key applications for the range of products include sustainable urban drainage systems, green infrastructure, Bluegreen roofs, podium decks and sports surface applications, which Polypipe's said will enhance its existing market-leading water management solutions range.

For the year to 30 September 2018, Permavoid is expected to record revenue of £3.8m and adjusted EBITDA of £0.5m.

Chief executive officer Martin Payne said: "The acquisition of Permavoid is a small but important step towards delivering on our strategic goals. The acquisition brings new intellectual property into the group with exciting opportunities for further product integration and innovation, allowing Polypipe to enhance its market leading water management and attenuation solutions in the UK, as well as provide opportunities to leverage those market leading solutions in Europe and other markets."