Acquisition of Harry Peers & Co Limited

RNS Number : 2337O
Severfield PLC
01 October 2019

01 October 2019

Severfield plc

("Severfield" or the "Group")

Acquisition of Harry Peers & Co Limited, a leading structural steelwork business within the nuclear, process industries and power generation sectors

Severfield plc, the market leading structural steel group, announces that it has entered into an agreement to acquire 100% of the share capital of Harry Peers & Co Limited ("Harry Peers") a leading full-service structural steelwork business, for a net initial consideration of £18.0 million payable in cash on completion (the "Acquisition"). A performance-based deferred consideration is in place, which could increase the purchase price by up to £7.0 million, which would be payable in late 2020.


·  The Acquisition will significantly expand and extend Severfield's current capabilities into attractive complementary market sectors: nuclear, process industries and power generation. Combining the businesses will enhance Severfield's position as the UK's broadest structural steel services group.

·     For the 12 months ended 30 April 2019, Harry Peers achieved audited revenues of £21.2 million and profit before tax of £3.4 million. The value of the gross assets as at 30 April 2019 was £24.0 million.

·      The Acquisition consideration will be funded by a combination of cash reserves and a term loan.

·      The Acquisition is anticipated to be earnings enhancing in its first full year of operation.

Strategic rationale for the Acquisition

The Board of Severfield believes that the long-term investment profile of Harry Peers's key market positions in the highly regulated markets of nuclear, process industries and power generation, enhances its areas of expertise and broadens its market exposure.

With the scale and capabilities of the Group, there are substantial opportunities to grow Harry Peers through a number of combined operational initiatives such as new business development functions for Harry Peers, European contract opportunities, and investment in technology-driven enhancements.

Harry Peers has also demonstrated capability in modular structural steel offerings, which Severfield will look to develop across its wider product range.

Harry Peers's commercial markets

The nuclear sector, including both the defence and commercial sectors, in which Harry Peers commands a niche, well-established and trusted position with blue chip customers, is forecasted to grow through the UK Government's decommissioning investment programme. The UK Government is forecasted to require a decommissioning budget of £164 billion over the next 120 years.

The process industries sector is wide ranging and includes pharmaceutical and petrochemical sectors. The installed base in the UK is extensive. Upgrades and development to operational sites provide ongoing opportunities for offsite modular solutions.

The power generation market, including energy-from-waste ("EfW") plants, which contribute 5.57TWh of electricity per annum, is forecast to grow on the back of the world economy seeking alternatives to carbon fuels. The UK Government has set a target of 15% of final energy consumption from renewable sources by 2020, meaning that 30% of electricity production will have to come from renewable sources.

Acquisition consideration and earn out details

The net cash initial consideration of £18.0 million is on a cash free, debt free basis. The total initial consideration will be £30.4 million which includes company cash and cash equivalents of £12.4m. The initial consideration will be financed by a combination of cash reserves and a term loan. A performance-based deferred consideration is in place, which could increase the purchase price by up to £7 million if certain financial and operational targets are achieved for the period to 31 August 2020 that would be payable in late 2020.

Alan Dunsmore, Chief Executive Officer, Severfield commented:

"This acquisition will help Severfield continue to deliver on its strategic objectives. Harry Peers's experience in specialist, highly regulated, non-cyclical markets will enhance our future growth plans through expanding the Group's capabilities and sector reach.

"We believe Severfield is best placed to help Harry Peers continue its profitable growth trajectory, through increased scale and investment and together with Harry Peers's strong management team we have a real opportunity to develop a broader position within the UK structural steel services market."






Alan Dunsmore

Chief Executive Officer


01845 577 896



Adam Semple

Group Finance Director




01845 577 896


Jefferies International

Simon Hardy

020 7029 8000




Will Soutar


020 7029 8000




Ginny Pulbrook

020 3757 4992




Tom Huddart

020 3757 4991



Notes to editors on Severfield:


Severfield is the UK's market leader in the design, fabrication and construction of structural steel, with a total capacity of c.150,000 tonnes of steel per annum. The Group has four sites, c.1,300 employees and expertise in large, complex projects across a broad range of sectors. The Group also has an established presence in the expanding Indian market through its joint venture partnership with JSW (India's largest steel producer).


Notes to editors on Harry Peers:

Founded in 1933 Harry Peers is a successful family-owned and run business, operating from its bespoke premises in Bolton. It offers a full project management service with particular expertise in the design, engineering, fabrication and erection of structural steelwork and associated engineering products for the nuclear, process industries and power generation sectors. Harry Peers currently has 63 employees.

The Harry Peers business mainly operates in the following three sectors:

·    Nuclear - Harry Peers has delivered structural steel projects in the nuclear sector, including in both the defence and commercial sectors, for 15 years and has developed key strategic relations with customers, including at the Sellafield nuclear fuel reprocessing and decommissioning plant in Cumbria, UK. Projects in this sector are unique as they include both new build and decommissioning contracts at each individual site.

·      Process industries - This sector relates to any industry where a large-scale process is carried out within a premises, such as a pharmaceutical or petrochemical business. Harry Peers has delivered projects in this sector for nearly 20 years.

·    Power generation - Harry Peers has delivered structural steel projects in this sector for over 40 years, including coal fired power stations, coal mines, combined heat and power stations, nuclear power stations, energy from waste plants, bio mass power stations and gas fired power stations. Significant projects in recent years have involved energy-from-waste (EfW) plants. This sector is constantly evolving as technology improves and there is further demand for waste management infrastructure, which Harry Peers is ideally placed to deliver.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit


Severfield (SFR)
UK 100

Latest directors dealings