The acquisition gives Severfield a manufacturing base at Voortman’s headquarters in Rijssen and will provide the business with greater access to the growing European market. In particular, Severfield has its eye on the electricity distribution sector which is currently experiencing high levels of growth.
Voortman is profitable and cash-generative. For the 12 months to December 2021, the company turned over €73.5m and made a profit of around €4.5m before tax.
The acquisition provides Severfield with immediate access to new market sectors outside its core UK operations. Voortman is highly regarded in the Netherlands for its in-house knowledge, innovation and expertise, said Severfield. The business has modern production facilities and currently produces around 15,000 tonnes of structural steelwork a year.
The company is co-located with Voortman Steel Machinery Holding (VSMH), a manufacturer of steel fabrication machinery. Severfield says the acquisition will allow for areas of future collaboration with VSMH including the development of robotic production methods, proprietary fabrication software and bespoke equipment.
VSCH primarily operates in the Dutch market which it estimates to be worth around €1.3bn a year. It claims to have a 5% market share and specialises in turnkey contracts for simple structure in the industrial, commercial and residential subsectors.
According to Severfield, VSCH has the capacity and resources to compete for more complex, higher-value projects and has the potential for further growth in the Netherlands and neighbouring EU countries.
Severfield chief executive Alan Dunsmore said: “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 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.”
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