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Norcros drives growth with 16m Vado deal

NORCROS, the Cheshire company which supplies showers, tiles and adhesives, is widening its product range with the acquisition of Vado, a bathroom tap and mixer shower specialist for up to £16m.

Wilmslow-based Norcros, the firm behind the Triton Showers brand, is paying an initial £11m in cash and assuming debt of £900,000 for West Country-based Eurobath International, which trades as Vado. A further £4.1m will be paid depending on Vado's financial performance over the next three years.

Vado, which was previously owned by two families, the Walkers and Williams, is a manufacturer and global distributor of bathroom controls including taps, mixer showers, bathroom accessories and valves, with strong brands and a product offering positioned at the mid- to high-end segment of its target markets.

The firm is headquartered in Cheddar, Somerset, and has 144 employees and has more than 1,000 customers, ranging from residential and commercial developers to high end boutique retailers and merchants.

The deal is expected to be earnings enhancing immediately. For the year ended December 31 Vado reported ebitda of £2.5m and profits of £2.1m on revenues of £25.6m.

UK revenue represents 55% of total revenue, the remainder comes from its global distribution network with sales to over 60 countries, most notably in the Middle East and Africa.

Its management team, led by MD Jim Williams, will be remaining with Norcros.

The North West company has funded the deal from existing cash resources and a £19m increase to its existing banking facility to £70m on existing terms.

It said the Vado deal is "an important step in supporting and accelerating" its growth strategy by expanding its product reach, brand portfolio and giving it strong positions in complementary market segments.

In addition Norcros said it intends to leverage the combined platform of Vado and its Triton shower business to drive increased demand for its products utilizing the enlarged customer base, broader product offering, dual branding, and extended geographical scope.

Chief executive Nick Kelsall said "The acquisition of Vado and its premium brands and excellent product offering is an exciting addition to the group's portfolio.

"I have been impressed with the commitment and passion of Vado's management and employees and am confident that they and the business will continue to thrive under Norcros ownership.

"This transaction represents the first step in our enhanced growth strategy of making selective and complementary acquisitions which have the capability of improving profitability as well as broadening our brand portfolio, product offering and distribution channels."

Jim Williams, managing director of Vado said "The Vado team is looking forward to working with Norcros to develop further business opportunities and to grow as part of a larger organisation".

Source : Chris Barry – The Business Desk

02 April 2013
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