A prominent UK supplier of fluid power products has agreed to acquire two similar companies for a sum of £10.2 million.
According to a report in Insider Media, Lancashire-based Flowtech Fluidpower has agreed to take over the entire share capital of Balu – the group which fluid power distributors Derek Lane and Beaumanor.
The deal, which has been described as a ‘double acquisition’ due to the fact Flowtech will take full control of both subsidiaries, will see the combined group expand considerably across the UK.
This is because the tie-in will see Flowtech take control of a second logistics centre based in the East Midlands and absorb Derek Lane’s Devon-based head office.
Flowtech has said that the deal will enable it to increase its target customer base by using “separate trading styles from the same platform,” while the group is also anticipating a substantial increase in profits.
Balu’s latest financial statements indicate that Derek Lane and Beaumanor collectively brought in £11.4 million in revenue in the year to 31 January 2018.
Commenting on the deal, Sean Fennon, Chief Executive of Flowtech Fluidpower, said: “We are delighted to announce the acquisition of Balu, which brings together three major catalogue brands in the UK marketplace and again widens the customer base we serve.
“It also gives us the opportunity to add a second logistics centre in Leicester which should deliver stock optimisation and supply chain improvements across the Group and operationally de-risk the main Skelmersdale site.”