Flowtech, the specialist in fluid power products, has successfully completed a £350,000 acquisition of underperforming pneumatics and fluid products supplier Thorite.
Flowtech, which is based in Flookburgh, Cumbria and listed in London, believes the purchase will deliver “significant benefits” such as enhanced operational efficiency, cost reductions, and improved profit margins.
The company also highlighted that Thorite’s existing locations would enable Flowtech to target new regions within the UK, offering a wider range of products and services with “minimal overlap”.
The merger is also set to unlock substantial cross-selling opportunities between the two companies’ customer bases, propelling further growth.
Flowtech’s takeover includes Thorite’s equipment, vehicles, inventory, and other assets. In addition, Flowtech has cleared Thorite’s £1.7m debt in return for a debtor book valued at approximately £2.6m, as reported by City AM.
The deal also encompasses an agreement to share any additional proceeds from the debtor book.
Despite Thorite’s recent financial woes, including a projected £1.2m loss for the year ending March 2024, Flowtech is confident it can turn around profitability within the first year post-acquisition.
For the year concluding on 31 March 2023, Thorite reported revenues of £21.2m and an operating profit of £79,000.
Flowtech’s CEO Mike England commented: “We are delighted to acquire this well-respected brand and skilled workforce. On behalf of all of us at Flowtech we welcome our new colleagues to the group.”
“This is an exciting moment for us all as both businesses have a history of deep expertise and knowledge in power, motion and control.”
“For us at Flowtech, adding Thorite’s expertise in pneumatics, automation and compressed air capability is an excellent fit and aligns perfectly with our strategy a world of motion which will enhance our scale, margin profile, and help to accelerate market share gains.”
Flowtech has announced that it will postpone the release of its half-year results for the period ending 30 June 2024 due to the recent acquisition, opting instead to focus on the incorporation of the new business. This move aims to give shareholders a clearer picture of the acquisition’s advantages.
The company also shared that it will confirm the revised publication date by 30 September 2024.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
