With revenues in the year to 31 December 2013 of £264 million and Adjusted EBITDA of £21 million, the Epwin Group has announced its intention to float on AIM. Epwin is a vertically integrated manufacturer of extrusions, mouldings and fabricated low maintenance building products, supplying the repair/maintenance/improvement, new build property and social housing sectors.
It is believed that admission to trading on AIM will provide an increased profile for the Group and its brands, a strengthened balance sheet, and the ability to use AIM quoted shares as currency for acquisitions. The company will also be completing a vendor placing.
The Placing and the Vendor Placing together will raise a total of £94 million. The expected net proceeds for the Group under the Placing will be £10 million and will be used to repay a proportion of the debt within the business, in combination with new debt facilities raised of £25 million. The reduced gearing within the Group, as well as the resulting reduced annual interest burden, will allow management to operate the business with greater flexibility and result in increased cash generation. This greater flexibility and cash generation may in due course allow management to pursue a range of strategic options, including (but not limited to); increased investment in the business, consideration of acquisition opportunities and increased shareholder returns by way of dividends.
Jon Bednall, Chief Executive Officer said:
“Epwin was one of the first entrants into the PVC-U window market in the mid 1970s. Since then the Group has broadened its product offering significantly, both organically and through acquisition, and grown market share. Today we believe there is potential for further organic growth in all business areas as well as opportunities to drive further sector consolidation and operational efficiencies. We are delighted with the strong support shown by our new investors and look forward to working with them to build on these strengths and grow our business.
“I am also pleased that Peter Mottershead has agreed to join the Board as Chairman. Peter’s industry experience and leadership will be a great asset to Epwin as we enter the next phase of the company’s development as a public company. I am also pleased to welcome Andrew Eastgate to the Board. Andrew knows our business well and brings tremendous advisory experience. We look forward to working together as we continue to develop the Group.”
The Group is the result of a merger in January 2012 between the Epwin Business and the Latium Business. The merger was effected by means of a new Epwin holding company acquiring Latium via share for share exchange.
The Epwin Business was founded by Jim Rawson in 1976 as one of the first suppliers of UPVC windows into the UK. After a period as a listed the business in the nineteen eighties and nineties, Jim Rawson took the business private again to lay the foundations for the much broader based, low maintenance building products business that the Group is today. Since then Epwin Business has grown and developed both organically and by acquisition to become a stable and substantial player, selling a much broader range of low maintenance building products.
From being a predominantly fenestration-orientated business before the take-private, with the acquisition of Swish Building Products, the Epwin Business began to diversify its product offering and subsequently played a role in consolidating the sector. The Epwin Business’s fabrication operation developed into a window profile systems manufacturer before widening its range of products to include cellular roofline and cladding extrusions, rainwater and underground moulding and extrusions, GRP and thermoplastic doorsets and glass sealed units.
The industry consolidation process led ultimately to a Merger with the Latium Businesses, owned by businessman and investor Brian Kennedy, in January 2012. This Merger created the current Group and gave Epwin a larger market share in its core markets as well as broadening its product portfolio and offering the opportunity to make synergistic cost savings.
The Group has made significant steps in delivering post-merger synergies over the last two years, having successfully delivered on an initial program of factory mergers, cost savings and logistics optimisation to improve efficiencies and profitability. The Directors continue to review the Group’s operations and identify further efficiencies from the Merger.
Employing in excess of 2,300 people, Epwin operates from approximately 1.2 million sq.ft. of leased production and warehousing space across the UK, with major facilities in Telford, Tamworth, Macclesfield, Scunthorpe, Paignton, Newton Abbot and Northampton. The group is structured in three primary operating divisions, designed to provide the most appropriate and relevant product offerings for its customers. These are the Building Components Division, Building Products Division and Window Systems Division.
Since December 2013, trading has continued to be in line with expectations, with revenues for the three months ended 31 March 2014 being approximately £62 million.
