Siteserv to buy Holgate Fencing in €19m deal

Siteserv, the building services company that floated two weeks ago, is to make a €19 million acquisition.

The company announced yesterday that it is buying Holgate Fencing in a combined cash and shares deal valued at €19 million.

Holgate manufactures crash barriers for motorways, railways and other facilities. The company's clients include civil engineering contractors, local authorities, State companies and Government departments.

In the 12 months ended April 30th, Holgate had a turnover of €12.2 million and generated operating margins of €1.7 million, or close to 15 per cent. It has net assets of €2.3 million. Siteserv provides scaffolding and fencing to building sites and contractors and is focused on the construction and infrastructure sectors.

Chief executive Brian Harvey said the Holgate deal fitted its strategy of building a broad-based site services business.

Siteserv said it would pay an initial €13.25 million for Holgate once the deal is completed. This will be made up of €11.75 million in cash with the balance paid in 2.7 million Siteserv shares to Holgate stakeholders. The company said these shares will be subject to an eight-month lock-up, which means that they cannot be traded for that time.

It will be applying to have them admitted to Dublin's IEX exchange and London's Alternative Investment Market (AIM), where it listed 16 days ago.

Siteserv has agreed to pay up to a maximum of €5.75 million over its next two financial years, depending on Holgate's performance. Siteserv said it would fund the acquisition from its own resources and €7 million in borrowings.

The company was formed two years ago and consists of Rent-a-Fence, which supplies specialist fencing to building sites, and Donohoe Scaffolding.