Hill & Smith Regulatory News (HILS)

9 January 2024

Hill & Smith PLC

Acquisition of Capital Steel

Hill & Smith PLC ("Hill & Smith" or "the Group"), the international provider of sustainable infrastructure products and services, today announces the acquisition of Capital Steel Service, LLC ("Capital Steel").

Acquisition of Capital Steel

The Group has completed the acquisition of the business and assets of Capital Steel from its shareholder, Robert Hickman, who will be staying with the business. The initial cash consideration is $6.25m (c.£5m), on a debt and cash free basis. Further cash consideration of up to $1.2m (c.£0.95m) is payable, conditional on Capital Steel's achievement of financial performance targets in the two years post-acquisition. The acquisition will be funded from the Group's existing banking facilities.

This is the fourth acquisition Hill & Smith has completed in the last 12 months, in line with the Group's strategy to acquire complementary businesses within attractive, high growth markets.

Capital Steel, located in Trenton, New Jersey, and led by Robert Hickman, supplies structural steel products and services principally into the electrical transmission and distribution market. It has served the utility and infrastructure needs across the US East Coast for over 25 years, with a focus on New York, New Jersey and Pennsylvania.

Capital Steel will become part of V&S Schuler Utilities Group, within our Engineered Solutions division. The business is highly complementary to our existing activities and will further accelerate our strategy in this high growth market. The acquisition will expand our geographical customer base, generate material cross selling opportunities and provide additional manufacturing capacity and capability.

In the 12 months to 31 August 2023, Capital Steel reported unaudited revenue of $8.1m, adjusted EBIT of $1.0m and gross assets as at 31st August 2023 of $3.7m. The acquisition is expected to be earnings enhancing to the Group in 2024.

Alan Giddins, Executive Chair, said:

"Capital Steel operates in one of our most attractive end markets, and the acquisition is in line with our strategy of acquiring businesses with strong long-term growth potential. We have known the business for many years, and it is an excellent fit with our existing, high growth US utility business. I am delighted to welcome Robert Hickman and his employees to the Group."

For further information, please contact:

Hill & Smith PLC

Alan Giddins, Executive Chair ?Tel: +44 (0)121 704 7434

Hannah Nichols, Chief Financial Officer

MHP

Reg Hoare/Rachel Farrington/Catherine Chapman ?Tel: +44 (0)7801 894577

Email: hillandsmith@mhpgroup.com

Notes to Editors

Hill & Smith PLC is a leading provider of sustainable infrastructure products and services. The Group employs c.4,400 people worldwide with the majority employed by its autonomous, agile, customer focussed operating businesses based in the US, UK, Australia and India. The Group head office is in the UK and Hill & Smith PLC is quoted on the London Stock Exchange (LSE: HILS.L).

The Group's operating businesses are organised into three main business divisions:

Galvanizing Services: increasing the sustainability and maintenance free life of steel products including structural steel work, lighting, bridges and other products for industrial and infrastructure markets.

Engineered Solutions: supplying engineered steel and composite solutions for a wide range of infrastructure markets including power generation and distribution, marine, rail and housing. The division also supplies engineered pipe supports for the water, power and liquid natural gas markets and seismic protection solutions.

Roads & Security: supplying products and services to support road and highway infrastructure including temporary and permanent road safety barriers, intelligent traffic solutions, street lighting columns and bridge parapets. In addition, the division includes two businesses which are market leaders in the provision of off-grid solar lighting and power solutions. The security portfolio includes hostile vehicle mitigation solutions, high security fencing and automated gate solutions.