Bergs Timber acquires Performance Timber Product Group1 July 2021
Bergs Timber AB has acquired the Performance Timber Products Group (PTPG). The group, which comprises Timber Windows, Dale Joinery and Mumford & Wood, had sales of approximately £22m in 2020.
Through the acquisition, Bergs gains access to a number of strong brands, wide knowledge of marketing and logistics, and a reputable producer of high-quality timber windows and doors. The transaction consolidates Berg's position in the UK and creates opportunities for further expansion in the joinery product area.
PTPG is one of the UK's leading players in the premium segment of wooden windows and doors. In addition to own production, the business comprises sales of bespoke windows and doors for mainly unique renovation projects as well as retail sales through a well-developed network of 43 showrooms in the UK.
Bergs acquired 100% of PTPG from Graphite Capital and current and former management of the company. An agreement has been reached with senior executives who will remain and continue to operate the business as a wholly owned subsidiary of Bergs.
A significant proportion of PTPG's products have been supplied for many years by Berg's subsidiary Byko-Lat in Latvia. This collaboration will now be further developed, combining local market presence and knowledge of customer needs in the UK market with efficient production of high-quality windows and doors. The transaction creates opportunities for Byko-Lat to implement the plans for further expansion and development of the manufacturing of windows and doors.
The acquisition is expected to contribute a turnover of approximately SEK250m per year and show an EBITDA margin that over time is in line with the Group's targets. In addition to a favourable cash flow, the acquisition is expected to make a positive contribution to earnings per share already during the current year.
The purchase price on a debt-free basis amounts to approximately SEK140m, of which approximately SEK110m relates to shares and is paid in cash. The acquisition is largely financed by a new loan within the framework of an existing loan agreement with Danske Bank and Swedish Export Credit Corporation.
Through the acquisition, Berg's reported goodwill and other intangible fixed assets will increase by approximately SEK120m.
"The acquisition of PTPG is fully in line with our strategy and strengthens our offering in the joinery product area,” said Peter Nilsson, CEO of Bergs. “We have had a long relationship with PTPG and have been impressed by their business model and market knowledge. We see good opportunities for growth in the UK but also in other geographic markets.”.
"We have a strong position in the market today with exciting opportunities to expand further,” said Jay Pengelly, CEO of PTPG. “Combining PTPG’s & Bergs’ wealth of expertise and adopting a sustainability approach we can create new conditions for developing the company. I am delighted to continue as CEO and create value together with the new owner.”