Strix Group PLC on Wednesday said it will undertake an equity placing to help fund its acquisition of Australian water systems firm, Billi.
The Isle of Man-based kettle safety controls provider said it had entered into a conditional agreement to acquire the entire share capital of Billi Australia, Billi New Zealand and Billi UK for £38 million. Strix’s equity placing will raise £10 million for the acquisition while the remainder will be funded through a new term loan.
The placing, which will be conducted using an accelerated bookbuild, will be used to prepay debt facilities that the group has negotiated in connection with the Billi deal. 8.7 million shares will be issued at 115 pence each.
Shares in Strix were trading 8.1% lower at 117.47 pence each on Wednesday morning in London.
Billi is an Australian brand supplying filtered and non-filtered instant boiling, chilled and sparkling water systems. In the 12 months ending December 31, Billi is expected to generate revenue of around £43.7 million and adjusted earnings before interest, tax, depreciation and amortisation of around £10.2 million.
Strix said the acquisition accelerates its growth plans for the water & appliance categories and it expects the acquisition to be mid-single-digit earnings accretive in the first full year of ownership.
It noted that Billi is benefitting from ‘structural market and ESG tailwinds’. These include an increasing focus on water filtration, a reduction in single-use plastics and a focus on energy consumption from heating water which is aligned with Strix’s sustainability goals.
Chief Executive Officer Mark Bartlett said: ‘We are delighted to enter this agreement to acquire Billi, a leading multifunctional taps manufacturer and distributor. Billi accelerates our strategy within our Water and Appliances categories which is core to Strix’s five-year plan. We look forward to welcoming the Billi team to the Strix Group and working together to grow our combined businesses.’
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