Polypipe Group PLC (LON:PLP) said it has acquired underfloor heating, heat pump and renewable heating systems specialist Nu-Heat Holdings Limited for £27mln on a cash-free, debt-free basis.
The FTSE 250 group said Nu-Heat’s market position is “complementary” to its existing brand portfolio and that the purchase will further expand its climate management solutions proposition as well as its “fast-growing position in packages involving renewable energy sources”.
READ: Polypipe hikes profit guidance again
Polypipe also said the acquisition creates added value via the integration with its Nuaire Mechanical Heat and Ventilation Recovery systems and is expected to be earnings accretive and deliver returns “in excess of the cost of capital in the first full financial year of ownership”. The purchase is also being funded through the firm’s existing debt facilities.
"I am delighted to announce the acquisition of Nu-Heat, which aligns with our key growth drivers, including our focus on low carbon heating and solutions for the environmental challenges facing the built environment. This acquisition will enable us to further develop our underfloor heating capabilities, and to develop new and exciting ways to integrate underfloor heating, heat pumps, and air-based climate management systems. The Nu-Heat team have fantastic technical and application knowledge, and I would like to welcome them to the Polypipe Group", Polypipe chief executive Martin Payne said in a statement.
The company also issued a brief trading update saying that trading had continued to recover throughout December, with underlying operating profit for the year to December 31, 2020, “slightly ahead” of its previous guidance of around £40mln.
Polypipe also said its momentum has continued into the new year without any material impact from the UK’s third lockdown.
The firm’s shares rose 2.1% to 524.6p in early deals on Tuesday.