RNS Number : 9791S
Severfield PLC
15 March 2023

15 March 2023

Severfield plc

('Severfield' or the 'Group')


€24m acquisition of Voortman Steel Construction Holding B.V., an innovative, market-leading European steel fabrication company, to accelerate Severfield's European growth strategy


Severfield plc, the market-leading structural steel group, is pleased to announce that it has entered into an agreement to acquire 100% of the share capital of Voortman Steel Construction Holding B.V. ('VSCH'), an innovative European steel construction group, for a net consideration of €24m payable in cash on completion (the 'Acquisition').



§ The acquisition of VSCH, a profitable, cash generative business headquartered in Rijssen, the Netherlands, will provide Severfield with a manufacturing base in Europe to complement its existing European business.

§ The Acquisition will provide Severfield with:

§ greater access to a growing European market and will open up attractive opportunities including access to the high growth electricity distribution sector and capabilities in design and build (turnkey) solutions for simpler structures. Combining the businesses will enhance Severfield's position as one of Europe's most diverse structural steel services groups.

§ growth opportunities through access to new European clients, particularly in the industrial, commercial and residential sectors, and a platform to offer a wider range of services to its existing clients.

§ For the twelve months to 31 December 2021, VSCH recorded unaudited consolidated revenues of €73.5m and a normalised (note 2) EBITDA of €4.5m. The business has achieved a normalised (note 2) EBITDA of between €4.5m and €5.5m over the past four years.

§ The Acquisition consideration will be funded by a combination of a new amortising term loan (c.€21m) and cash reserves (c.€3m).

§ The Acquisition is anticipated to be earnings enhancing in the year-ending 31 March 2024.


Strategic rationale for the Acquisition

The Board of Severfield believes that VSCH is an attractive acquisition opportunity. It is profitable, cash generative and provides a manufacturing base in Europe, allowing Severfield to benefit from VSCH's strong reputation in the Netherlands and its growing pipeline of opportunities. The Board believes that the Acquisition will enhance the Group's reputation and presence in the European market, building on its existing European business, and will help accelerate Severfield's European growth strategy.


The Acquisition provides Severfield with immediate access to new and attractive market sectors, providing the Group with further market and geographical diversification outside its core UK operations. VSCH is highly regarded by its clients and the Acquisition presents Severfield with a number of opportunities for further profitable growth, including access to a wider European client base and a platform to offer a wider range of services to its existing clients.


VSCH is renowned in the Netherlands for its in-house knowledge, innovation and expertise. The business is well invested with modern and highly efficient production facilities, generating output of c.15,000 tonnes per annum, and is co-located with Voortman Steel Machinery Holding B.V. ('VSMH'), a manufacturer of steel fabrication machinery. The Acquisition will allow for areas of future collaboration with VSMH including the development of 'robot' production technology, proprietary fabrication software and bespoke equipment. The Acquisition will also enable Severfield to leverage VSCH's local knowledge to assist with the growth of its existing European business.


Entrance into new geographies and markets

VSCH primarily operates in the Dutch market with an addressable value of c.€1.3 billion per annum, which is expected to grow. It mainly serves the industrial, commercial and residential subsectors. The underlying market growth is being driven by private sector investment in new assets and significant government backed investment. VSCH has a well established, leading position in the Dutch market commanding a c.5 per cent market share with no single competitor having more than a c.10 per cent market share. VSCH has the capacity and resources to compete for larger, more complex, higher value projects, and its scale and market position presents opportunities for further growth in the Netherlands and into neighbouring EU countries.


The Acquisition also provides Severfield with access to the fast growing Dutch electricity distribution market. This market has high barriers to entry and the current low carbon energy transition trend is driving demand for upgrading and expanding the electricity network in the Netherlands (and in other EU countries) over the next ten years. VSCH has strong relationships with key contractors for these projects which, together with the projected market growth, presents opportunities to increase revenue over the coming years.


VSCH is one of the few providers of design and build (turnkey) solutions for simpler structures in the Netherlands. There is an opportunity to significantly grow this business in Europe, which is currently in its infancy, serving SMEs and smaller projects. This proposition adds new capabilities to the Severfield offering and opens up an attractive new market, providing opportunities for growth in the UK as well.


Acquisition consideration and financials

VSCH is being acquired for a net cash consideration of €24m, on a cash free, debt free basis assuming a normalised level of working capital on completion. The total cash consideration will be €29.5m including cash and cash equivalents of €5.5m, which is being funded by a combination of Group cash reserves (c.€8.5m) and a new term loan (c.€21m), repayable over a five year period.


For the twelve months to 31 December 2021, VSCH recorded unaudited consolidated revenues of €73.5m, EBITDA of €3.1m and a statutory profit before tax of €1.0m. The value of the gross assets as at 31 December 2021 was €24.1m.


The Acquisition is expected to complete on the earliest of either 3 April 2023 or satisfactory completion of the works council consultation process, as required under Dutch Law.


Alan Dunsmore, Chief Executive Officer commented:

'Severfield has been growing and developing its European presence over recent years and the acquisition of VSCH will help the Group continue to deliver on its growth strategy. VSCH is highly regarded in the Netherlands delivering a quality service to its large European customer base and has been growing its capabilities in the high growth electricity distribution sector and through new design and build (turnkey) solutions.


We believe that the combination of Severfield and VSCH will result in a broadening of our service offering and an ability to grow in different sectors and geographies. Not only is the acquisition of VSCH anticipated to be earnings enhancing in its first full year of ownership, the transaction will further cement our position in a growing European market and provide opportunities for further profitable growth.


We look forward to working with the VSCH management on building new business opportunities together and driving future growth from within the combined Group.'

For further information, please contact:



Alan Dunsmore

Chief Executive Officer

01845 577 896

Adam Semple

Chief Financial Officer

01845 577 896

Jefferies International

Simon Hardy

020 7029 8000

Will Soutar

020 7029 8000

Liberum Capital

Nicholas How

020 3100 2000

Ben Cryer

020 3100 2000


Ginny Pulbrook

020 3757 4992

Tom Huddart

020 3757 4980


This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, which forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.


Notes to editors - Severfield:

Note 1 - Severfield is the UK's market leader in the design, fabrication and construction of structural steel, with a total capacity of c.130,000 tonnes of steel per annum. The Group has six sites, c.1,700 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 Steel (India's largest steel producer).


Note 2 - EBITDA in 2021 has been normalised for the impact of sharply rising steel prices, mainly as a result of the conflict in Ukraine, which VSCH were unable to pass onto existing customers for a limited period of time.


Notes to editors - VSCH:

Note 3 - VSCH, headquartered in Rijssen, the Netherlands, is a leading high-end steel construction company, with business activities in the Netherlands. VSCH specialises in steel construction, industrial construction, design and build solutions, and energy construction. Over recent years, VSCH has transformed itself from a bulk steel constructor to a provider of high-end tailor-made steel solutions with an impeccable track record. VSCH currently has c.140 employees.

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