Severfield buys fabricator Dam Structures in £27m deal

Grant Prior 3 years ago
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Steel giant Severfield has acquired fabricator DAM Structures Limited in a deal worth up to £27m.

Severfield will initially pay £12m cash for the business with a further £7m payable in 2022 and a performance based consideration of up to £8m over five-years.

DAM Structures had a turnover of £22.3m and a profit before tax of £1.9m for the twelve months to 31 October 2019 and the company’s gross assets were £14.2m. The firm employs 76 people.

The core business of DAM Structures involves on-site work with main contractors and ground and demolition contractors, often prior to the stage of project construction at which Severfield would typically become involved.

In addition to its core steel fabrication markets, DAM Structures operates in the propping, railway and steel piling markets.

Severfield said: “Within the railway sector, there are significant opportunities for growth in the UK from Network Rail electrification programmes and elements of the HS2 project that are not currently addressed by Severfield, such as temporary and permanent tunnel work.

“All these opportunities will complement the Group’s existing expertise in bridges and stations.

“The Network Rail electrification programmes also offer opportunities in the steel piling market for immediate and significant growth over the next ten years in England, Scotland and Wales.

The propping business of DAM Structures provides bespoke fabricated propping systems to demolition and groundwork contractors, an area of the business which also represents a growth opportunity for Severfield.”

Alan Dunsmore, Chief Executive Officer, Severfield added: “This is a very exciting, highly complementary acquisition which will help the Group continue to deliver on its strategic growth objectives.

“DAM Structures will provide us with access to existing and new customers earlier in the construction process as well as access to new market sectors with strong growth potential including the growing rail electrification sector.

“DAM Structures has an established client base and proven track record of delivering quality services and will fit in well with the Severfield culture and team.

We look forward to working with the DAM Structures management team on building new business opportunities together and driving future growth from within the combined Group.”

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