Lancashire-headquartered Flowtech announces £10.2m acquisition and placing

North West technical fluid power products supplier Flowtech is set to acquire its counterpart in Leicester.

The Skelmersdale-headquartered company entered into a deal to purchase fluid power equipment company Balu Limited, along with its trading subsidiaries Beaumanor and Derek Lane, for £10.2m.

Both subsidiaries were founded in the 1970s and between them employ 72 people. Beaumanor is based in Leicester, while Derek Lane operates from premises in Newton Abbot, Devon.

The wider Balu business recorded a revenue of £11.4m for the year ending January 31 2018.

To fund the transaction, Flowtech has tasked brokers Zeus Capital and finnCap with coordinating a share placing to raise up to £11m.

Flowtech Fluidpower plc CEO Sean Fennon said: “We are delighted to announce the acquisition of Balu which brings together three major catalogue brands in the UK market place and again widens the customer base we serve.

“It also gives us the opportunity to add a second logistics centre in Leicester which should deliver stock optimisation and supply chain improvements across the group and operationally de-risk the main Skelmersdale site.”

He added: “We are also pleased to announce the successful placing to raise £11m which demonstrates clear support from both new and existing shareholders for our ongoing strategy to develop a focused fluid power group that serves a wide number of industry sectors.”

Lisa Botterill, partner at law firm Shakespeare Martineau, advised Beaumanor on the deal.

She said: “Beaumanor has played a major role within the engineering community in Leicester and this deal will ensure that its success will continue on into the future.

“Securing the support of a large organisation in the same industry will allow business expertise to be shared and joint opportunities to be capitalised on. Beaumanor’s decision to sell has left the business in an incredibly strong position and will be perfectly-placed to drive future growth.”

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