Acquisition of a Competitor Plumbing Business in the South West
£380,000 · 5 years · 7.50% fixed. The owner of a plumbing and heating business in Bristol identified an opportunity to acquire a retiring competitor - adding their customer base, six trained engineers, a fully equipped van fleet, and a maintenance.
The Client
Owner of a plumbing and heating business in Bristol
The Challenge
The owner of a plumbing and heating business in Bristol identified an opportunity to acquire a retiring competitor - adding their customer base, six trained engineers, a fully equipped van fleet, and a maintenance contract book valued at £280,000 per annum. The acquisition price was £480,000. The buyer had £100,000 equity and needed £380,000 of acquisition finance.
Our Solution
Doulton arranged a secured acquisition loan assessed primarily on the combined EBITDA of both businesses post-acquisition. The target's maintenance contract book - a highly visible recurring revenue stream - was central to the lending case. The loan was secured on the combined business assets and a personal guarantee from the owner.
The Outcome
Acquisition completed. Combined business now employing fourteen engineers. Annual maintenance contract revenue: £510,000 (buyer's own plus acquisition target). Loan being repaid comfortably from combined cash generation. Key highlights: Maintenance contract book - recurring revenue central to lending; Combined post-acquisition EBITDA used for affordability; 14 engineers and £510k recurring revenue in combined business.
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