Clipper Logistics PLC (LSE:CLG) has struck a deal to acquire a Netherlands based consumer electronic repairs specialist for up to €17.5mln, strengthening the group’s existing repair offering in the UK and mainland Europe and immediately enhancing earnings.
The logistics and e-fulfilment provider to the retail sector said it has agreed to acquire CE Repair Services Group BV, which provides electronic equipment repairs for global blue-chip companies.
Clipper said the Dordrecht-based outfit has built a market leading position across the Benelux region, and generated underlying earnings (EBIT) of €1.9mln on revenue of €23mln in calendar 2020.
The initial consideration to be paid will be €12.5mln in cash, with up to a further €5mln deferred consideration dependant on EBIT growth to €3.5mln in the 2024 calendar year.
As part of Clipper’s ‘value-added returns’ services for retailers, its Servicecare and RepairTech businesses repaired more than a million electrical products in the past financial year.
The group highlighted that the acquisition, which is expected to be completed once various formalities have been achieved in the next few weeks, would extend its geographical footprint in mainland Europe and in particular its presence in the circular economy with a full end-to-end suite of services for online and omnichannel retailers.
Directors have already identified opportunities for cross-selling between CE Repair and Clipper's existing customer base.
Steve Parkin, Clipper's executive chairman, said: "We are delighted to have increased our footprint in technical services with this acquisition. CE Repair is a profitable and cash generative business and will enable Clipper to widen the range of services that we can offer our customers in mainland Europe."
The assets in the CE business are acquired on a cash free and debt free basis. The consideration is being funded from Clipper's existing cash and bank facilities.