Fluid power products supplier, Flowtech, has struck a £350,000 deal to acquire the struggling pneumatics and fluid products provider Thorite.
The London-listed firm, which is headquartered in Flookburgh, Cumbria, said the acquisition would bring “significant benefits” including better operational efficiency, cost savings, and improved profit margins.
It added that Thorite’s existing locations would help Flowtech expand into new areas across the UK, offering additional products and services with “minimal overlap”.
The combined business is also expected to see strong opportunities for cross-selling products to each company’s customer base, enhancing overall growth.
Flowtech will acquire Thorite’s equipment, vehicles, stock, and other assets. Additionally, Flowtech had paid off Thorite’s £1.7m debt in exchange for a debtor book valued at £2.6m.
This transaction also includes a deal to share any extra funds recovered from the debtor book.
Despite Thorite’s recent financial struggles, including an estimated £1.2m loss for the year ending in March 2024, Flowtech said it expected to restore profitability within the first year of ownership.
In the year ended 31 March 2023, Thorite generated revenue of £21.2m and delivered an operating profit of £79,000.
Mike England, CEO of Flowtech, said: “We are delighted to acquire this well-respected brand and skilled workforce. On behalf of all of us at Flowtech we welcome our new colleagues to the group.
“This is an exciting moment for us all as both businesses have a history of deep expertise and knowledge in power, motion and control.
“For us at Flowtech, adding Thorite’s expertise in pneumatics, automation and compressed air capability is an excellent fit and aligns perfectly with our strategy – a world of motion – which will enhance our scale, margin profile, and help to accelerate market share gains.”
Flowtech said that following the acquisition, it would delay the release of its half-year results for the period ending 30 June 2024 in order to allow management to focus on integrating the new business and provide shareholders with more information about the acquisition’s benefits.
It added that the new date would be announced by 30 September 2024.