We are pleased to announce the acquisition of the entire share capital of Aaron Heating Services Ltd (“Aaron” or “the business”) for an initial cash consideration of £6.7 million (the “Acquisition”). Aaron is a heating services and installations company, providing services primarily for Housing Associations and Local Authorities in East Anglia and the surrounding region.
Aaron complements the current activities of the Group’s other gas compliance businesses: K&T Heating, which operates in London and the South East, and the recently acquired Sure Maintenance, which operates in the North of England and the Midlands. The acquisition will allow Lakehouse to extend its geographic footprint in the gas servicing and maintenance market to provide national coverage to key clients. In addition, Aaron offers a platform to sell a wider range of the Group’s compliance services into its existing client base, along with the complementary offering of our Regeneration East business, which covers a similar geographic footprint.
The business was founded in 1985 by Dawn and Allan Wright and now employs some 390 staff, of which some two thirds are engineers. The business is headquartered in Ipswich, with regional offices in Lincolnshire, Northamptonshire, Norfolk and Essex. The business is currently owned by Dawn and Allan Wright and their immediate family, together with the current Managing Director, David Lummis and Commercial Director, Jon Posey.
Following completion of the acquisition, David Lummis, Jon Posey and the current management team will remain with the business. As a result of the acquisition, Lakehouse’s total headcount will rise to more than 2,300.
The acquisition represents a further step in Lakehouse’s growth strategy as the Group continues to expand and develop through targeted, complementary acquisitions which broaden its service offering and geographical reach.
In the financial year ended 31 March 2015, Aaron reported a turnover of £26.3 million and profit before tax of £0.9 million. Aaron had gross assets of £10.5 million as at 31 March 2015. Allowing for the need to integrate Aaron into the Group’s recently expanded gas compliance business, the Group expects the acquisition of Aaron to be earnings enhancing in the first full year.
Under the terms of the acquisition, the consideration comprises an initial amount payable in cash on completion of £6.7 million to the sellers of the business and further deferred consideration of up to a maximum of £3.3 million, which is dependent on Aaron’s financial performance in the period up to 30 September 2017.
Stuart Black, Executive Chairman of Lakehouse, said:
“Aaron’s specialist skills, client base and business infrastructure give us a platform to capitalise on the growth opportunities from within the UK compliance services industry. As stated at the time of Admission, Lakehouse has a proven track record of acquiring and integrating businesses which complement and enhance our strong organic growth.
“Supporting the existing services of our compliance division, the acquisition will extend the geographical footprint of the Group’s gas business and enhance Lakehouse’s already solid platform throughout East Anglia and the Midlands for all its services and creates further opportunities for cross-selling.”
David Lummis, Managing Director of Aaron, said:
“We’re thrilled to be joining Lakehouse, which will allow us to build on a successful period of strong and consistent growth. Combining our specialist skills with the Group’s experience and client base means we are in the best position to bolster our presence in the compliance market, strengthening our existing relationships and extending our high levels of customer service across a widened geographical reach.”
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