Brickability Group PLC (AIM:BRCK)’s acquisition of ET Clay Products is “on attractive terms”, according to analysts at Shore Capital, which reiterated its ‘Buy’ rating on the stock.
Shore Capital believes the £11.6mln purchase of the clay brick and tile specialists is an “attractive, earnings accretive deal which is consistent with management’s strategy to grow out its footprint in core clay brick and tiles distribution businesses”.
The cost is split between an initial cash consideration of £8.1mln and an earn-out of £3.5m paid over the next three years subject to certain performance criteria being met.
Analysts at the bank believe the brick company offers a “holy trinity of value, growth and financial quality”.
“The group operates in attractive niche markets and, in our view, creates significant shareholder value through its M&A strategy.”
“Its track record is excellent with 16 deals now completed since IPO (August 2019), the most-high profile of these being the acquisition of Taylor Maxwell in June 2021, which was awarded AIM’s ‘Transaction of the Year’ award.”
Brickability announced earlier today that it acquired ET Clay, which is expected to be immediately earnings enhancing and will bring new customers to the group.