Financial due diligence was provided by Yorkshire based Rob McCarthy of Dow Schofield Watts Transaction Services to West Yorkshire workplace equipment provider HC Slingsby on the purchase of Norwich-based counterpart in a £3.9m deal financed through a combination of cash and asset backed debt.
ESE is a profitable company operating in the same sector as Slingsby and was established in 1975 in Norwich.
Originally operating under the name Eastern Storage Equipment, the business has grown from supplying shelving, mezzanine flooring and partitioning to offering industrial and commercial equipment encompassing office and commercial, workshop, site safety, security, and environmental supplies, largely via the internet.
It is a condition of the acquisition that ESE has £600,000 in cash at completion, which Slingsby considers is surplus to working capital requirements. Accordingly, ESE is being acquired for a consideration of £3.3m on a cash free/debt free basis.
The acquisition provides Slingsby, which supplies ladders and storage boxes, with an opportunity to diversify its brand portfolio and to target different sub-sets of customers with alternative service propositions and varying pricing strategies.
ESE made profit before tax of £351,577 in the year to 31 December 2014 on sales of £6.5m.
Slingsby managing director Dominic Slingsby said: “We are delighted with the acquisition. We have been looking at suitable targets for some considerable time and ESE Direct is an excellent fit.
“The incremental profitability and synergistic benefits will place the wider group in a far stronger position for both companies to better exploit opportunities in their respective market sectors.”