Volution Group plc Acquisition of ClimaRad BV (0903J)

TIDMFAN

RNS Number : 0903J

Volution Group plc

18 December 2020

Embargoed until 07:00

Friday 18 December 2020

Volution Group plc

Acquisition of ClimaRad

Market leader for decentralised ventilation systems in the Netherlands

Volution Group plc ("Volution" or "the Group" or "the Company", LSE: FAN), a leading international designer and manufacturer of energy efficient indoor air quality solutions, is pleased to announce that it has acquired 75% of the issued share capital of ClimaRad BV ("ClimaRad"), the market leader for decentralised ventilation systems in the Netherlands.

Acquisition terms

The acquisition of 75% of ClimaRad will be for a cash consideration of EUR42 million on a debt free cash free basis (approximately GBP38 million), to be funded from the Group's existing cash and its recently announced GBP150 million Sustainability Linked Revolving Credit Facility.

Volution will then acquire the balance 25% of ClimaRad held by the co-founder, Peter Schabos, and four of the current directors and management team of ClimaRad (Clemens Veldhof, Rutger Vasters, Ralph Liedenbaum and Bas Verbeek) on or before 28 February 2025. The 25% purchase in 2025 will be for an additional cash consideration equal to 25% of a multiple of 13 times the EBITDA of ClimaRad for the financial year ending 31 December 2024, and is subject to a cap. Peter Schabos will continue to act as an adviser post completion and the current directors and management team of ClimaRad will also remain with the business.

The acquisition is expected to be earnings accretive for the Group.

Background to ClimaRad

Founded in 2005 and headquartered in Oldenzaal, Netherlands, ClimaRad has become the market leader for decentralised heat recovery ventilation in the Netherlands. The company designs and manufactures innovative heat recovery ventilation systems, many incorporating filtering, heating and comfort cooling capability, primarily to the residential and care home sectors with further presence in the office and education sectors. Its products are manufactured in its own scalable, low cost and efficient production facility in Sarajevo, Bosnia-Herzegovina.

For the financial year ended 31 December 2019, ClimaRad generated revenues of EUR8.7 million and profit before tax of EUR2.5 million, with gross assets of EUR7.1 million. For the year ending 31 December 2020, ClimaRad is expected to grow revenues to approximately EUR12 million with margins increasing significantly in the year benefitting from operational leverage.

Structural and regulatory market drivers

There are a number of structural and regulatory trends which Volution is well placed to capitalise upon. For the Group both the European Green Deal Renovation Wave funding and the UK Green Industrial Revolution plan, focus on "building back better" with key principles to improve air quality and decarbonisation of heating and cooling in refurbishment.

In addition, favourable European Building Regulations continue to define low carbon ventilation solutions in new build where decentralised approaches provide advantages for a wide number of applications in the Netherlands and beyond. This acquisition will further strengthen Volution's capability to capitalise upon the growth opportunities supported by these trends.

Strategic Rationale

The acquisition of ClimaRad is in line with the Group's strategy to grow by selectively acquiring value-adding businesses in new markets and geographies across the residential ventilation market and, where appropriate, in the commercial ventilation market.

With the ClimaRad proposition integrating ventilation and heat emitters, they complement the existing Volution portfolio of mechanical ventilation with heat recovery and fan coils. Against the backdrop of additional legislation, extending the Group's decentralised product range provides additional opportunity for growth across its European and UK sales channels.

Ronnie George, Volution Chief Executive Officer, commented:

"We are delighted to welcome ClimaRad to the Volution Group. Their innovative decentralised approach has delivered significant revenue growth and margin expansion in the last couple of years and we are excited about the direction of travel. Establishing an all in one integrated product range including both heat recovery ventilation and heat emittances ready to link to low carbon heat sources, offers growth opportunities in both new build and refurbishment applications in a number of Volution's key markets."

-ends-

For further information:

 
 
 Volution Group plc 
 Ronnie George, Chief Executive 
  Officer                          [phone] 
 Andy O'Brien, Chief Financial 
  Officer                          [phone] 
 
                                   [phone] 
 Tulchan Communications             4200 
 James Macey White 
 David Allchurch 
 Giles Kernick 
 

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

Volution Group plc Legal Entity Identifier: 213800EPT84EQCDHO768.

Note to Editors:

Volution Group plc (LSE: FAN) is a leading international designer and manufacturer of energy efficient indoor air quality solutions. Volution Group comprises 16 key brands across three regions:

UK: Vent-Axia, Manrose, Diffusion, National Ventilation, Airtech, Breathing Buildings, Torin-Sifan.

Continental Europe: Fresh, PAX, VoltAir, Kair, Air Connection, inVENTer, Ventilair, ClimaRad.

Australasia: Simx, Ventair.

For more information, please go to: www.volutiongroupplc.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

ACQFFFELFFLDLII

(END) Dow Jones Newswires

December 18, 2020 02:00 ET (07:00 GMT)