Van Elle takes over steel foundations company ScrewFast

(Sharecast News) - Geotechnical and ground engineering company Van Elle has acquired 100% of helical pile and steel modular foundations company ScrewFast Foundations, it announced on Thursday, for a maximum consideration of £3.68m.
The AIM-traded firm said initial consideration of £1.76m was payable in cash on completion, with up to a further £1.92m of deferred and performance-based cash consideration payable in August 2023.

It said the acquisition would strengthen the group's position in the specialist piling segment across the growth markets of infrastructure and housing, adding that ScrewFast's helical piling and integrated foundation system complemented Van Elle's existing capabilities, allowing it to capture more of the value chain through providing modular forms of construction and enabling cross-selling opportunities.

The transaction would also strengthen Van Elle's position in the highways sector, ahead of Highways England's five-to-10 year Smart Motorway Alliance, and would also provide new clients and market opportunities in the power and telecoms sectors.

Finally, the board said it would strengthen the group's capabilities for the provision of foundation solutions to the electrification and signalling programmes in the rail sector.

The company said the consideration would be funded from existing cash resources, with the acquisition expected to be "modestly" earnings-enhancing during the first full year of operation.

"This is a very exciting, complementary acquisition focussed on our higher margin, specialist piling activities which strengthens our leading position in growth markets such as highways and rail," said Van Elle chief executive officer Mark Cutler.

"ScrewFast has an established client base and proven track record of highly specialist services and will support the Group in the delivery of its medium-term strategic objectives.

"The two businesses have a similar culture and ethos which is very important to us, and we look forward to working with the ScrewFast team as we welcome them into the group."

Cutler said Van Elle's management was still "encouraged" by the company's progress, with expectations for the year unchanged from those it laid out in January.

"Whilst we remain cautious, given that the recovery in some of our markets is still at an early stage, we are very confident that the group is well-positioned to benefit from the continued execution of our growth strategy."

At 1523 BST, shares in Van Elle Holdings were up 10.26% at 43p.