Ultimate Products (UP) has agreed to a £34m takeover deal for Salter Brand. With its history stretching back to 1760, Salter is the UK market leader for bathroom and kitchen scales. The deal revolves around a share placing and an offer for subscription through the Primary Bid platform to raise £15m towards the acquisition.
UP has also entered into a new additional £10m conditional term loan agreement with its bankers to part-finance the initial consideration. This facility, which runs to October 1, 2024, will sit alongside the group’s existing bank facilities.
UP has licensed the Salter brand for the sale of kitchen electrical and cookware products, excluding Salter scales, with the current licence due to expire in 2024. It is therefore well placed to ensure that the brand reaches its full potential. The acquisition eliminates royalty payments and risk around the current Salter licence and will also deliver the opportunity to further develop Salter’s international sales, which are currently at a modest level.
For the financial year ending July 31, 2022, the first full year of ownership of Salter, the Ultimate Products board says that Salter will contribute revenues of some £16.7m, EBITDA in excess of £4.6m and underlying profit before tax in excess of £4m.
In a trading update, Ultimate Products said it anticipates its performance in the fiscal year 2021 will be in line with current expectations, with revenues forecast to be in excess of £133m, compared with £115.7m in 2020.
While the group has seen an increase in shipping rates, its board currently expects underlying EBITDA for 2021 to exceed £13m, against £10.4m the previous year, with underlying profit before tax in excess of £10.8m, up from £8.2m a year ago.
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