Stelrad buys Italian radiator company in €28.2 million deal


Stelrad Group PLC on Thursday said it has agreed to buy DL Radiators srl from De Longhi Industrial SA, following its initial public offering in November 2021.

The manufacturer and distributor of radiators started trading on London's AIM market in November last year, at a price of 219.00 pence each.

Shares are currently 8.8% behind of the IPO price; being untraded at 199.72 pence each in London on Thursday morning.

Stelrad said that DL Radiators' main manufacturing site is located in Moimacco, near Udine, Italy. It currently employs around 350 people.

The radiator company said that the purchase builds on its acquisition policy and strategy. DL Radiators will extend the range of radiators available to its existing sales and distribution network, expand its routes to market, provide a complementary brand and increase its manufacturing capacity, the company added.

Further, in 2021 DL Radiators reported €86.9 million in revenue and €5.0 million in normalised earnings before income, tax, depreciation and amortisation.

Stelrad said it will buy DL Radiators for €28.3 million, based on a enterprise value of six times normalised Ebitda. The transaction will be funded from existing facilities including temporary use of a £20 million accordion option.

Stelrad expects the acquisition to be earnings enhancing in the current financial year with double digit earnings per share enhancement in future years.

The company added that DL Radiators' management team, led by Chief Executive Stefano Valente, will continue to run the business with Stelrad's oversight.

The transaction is anticipated to close in the coming weeks.

Chief Executive Trevor Harvey said: ‘Following completion of this transaction, Stelrad will be a market leader in six countries and hold a top three position in five more. We will continue to develop our mainland European relationships with the long-established regional distribution players in those territories, ensuring we continue to adapt to evolving routes to market.’

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