Brickability Group, listed on the Alternative Investment Market (AIM), plans a share placing to fund the £63m acquisition of Taylor Maxwell.
The placing comprises a £55m primary placing on behalf of the company and a £38m secondary placing on behalf of certain selling shareholders. Net proceeds of £52.7m will be used to fund the acquisition of Taylor Maxwell and future bolt-on acquisitions, directors said.
The conditionally agreed transaction turns the company management from majority owners to minority owners. Brickability’s directors and management will retain a shareholding of approximately 28.3%, down from approximately 54%.
All this needs to be formally ratified by shareholders at a meeting on 29th June 2021.
Brickability floated on the AIM in 2019 with the intention of growing by acquisition. Its first purchase after that was McCann Roofing Products, a distributor and importer.
Brickability describes itself as the UK’s market leading supplier of facing bricks, blocks, rain screen cladding systems, architectural masonry, roof tiles and slates to the construction industry. The group includes DSH Flooring, Frazer Simpson doors and windows, Crest, Crown Excel and McCann roofing products. It turned over £187m in 2020.
Taylor Maxwell turned over £250m last year and so will more than double the size of Brickability.
Taylor Maxwell was founded in 1959 by R. Taylor and Eric Mclean Maxwell. Headquartered in Clifton, it is a leading supplier of timber and cladding – both new product segments for Brickability. Key customers include Vistry Group, Lovell Homes, Bloor Homes, MKM Building suppliers and AVS Fencing and Landscaping Supplies. Taylor Maxwell operates from 16 office and showroom locations across the UK.
John Richards, chairman of Brickability, said: "The acquisition of Taylor Maxwell is the 11th strategically significant acquisition made by Brickability since 2018 and is absolutely in line with the strategy we set out at IPO. As Brickability continues to grow, this acquisition marks a significant expansion in the range of solutions we can deliver for our growing client base and represents a significant value-add for our shareholders.
"The team continues to identify and evaluate opportunities as we continue to deliver the IPO promise, retaining focus on diversification and expansion.
"Taylor Maxwell has been providing façade and timber products to the construction industry for over 60 years. The firm operates from 16 regional locations across the UK, with minimal overlap against Brickability’s existing client base. Over the years, Taylor Maxwell have acquired a wealth of local market knowledge, enabling them to build strong professional relationships with a diverse range of key manufacturers.
"The acquisition of Taylor Maxwell will bolster Brickability’s leading position in UK brick distribution; offering cost and revenue synergies while being transformational in terms of the group’s scale and relevance in the wider materials supply industry.”
Chief executive Alan Simpson added: "Taylor Maxwell is a business we have earmarked for acquisition since IPO as we believe the union will bring significant short and long-term benefits to both companies and customers.
"Access to Taylor Maxwell’s longstanding relationships, distribution channels and local knowledge will greatly improve Brickability’s access to the UK marketplace while also delivering procurement, revenue and structural synergies.”
Taylor Maxwell managing director Martin Rudge said: "Taylor Maxwell's management team view the transaction as an exciting new chapter in the history of the business, one that they feel will benefit its employees, customers and suppliers alike.
“We are very proud of what has been achieved over the last sixty years and how the business has developed into the company it is today. Growth in recent times has been organic and this transaction is seen as a great opportunity to develop the business further as part of a larger organisation.”