Flowtech Fluidpower, a prominent hydraulics firm based in Skelmersdale, has acquired Bradford’s Thomas Wright/Thorite Group for £350,000 following its administration. This strategic acquisition is expected to bring significant operational efficiencies and synergies to Flowtech’s operations.
Thomas Wright/Thorite Group, a distinguished provider of pneumatics, compressed air, vacuum, and fluid-handling products and systems, has been operational since 1850, with seven sales and service centres across the UK. The acquisition aligns with Flowtech’s strategic objectives, promising substantial operational efficiencies, procurement leverage opportunities, and economies of scale. These factors are anticipated to result in material cost savings and improved margins over the medium term.
The acquisition includes all plant, machinery, vehicles, stocks, and intangible assets of Thorite. Flowtech will fund the £350,000 cash consideration from its existing bank facilities. Additionally, Flowtech has repaid Thorite’s outstanding debtor finance facility of approximately £1.7 million in return for a debtor book amounting to around £2.6 million, also financed via the group’s bank facilities. A sharing arrangement concerning debtor book recoveries exceeding the initial £1.7 million has been agreed with Thorite’s administrators.
Thorite’s audited accounts for the year ended March 31, 2023, showed a revenue of £21.2 million and an operating profit of £79,000. The gross value of the assets being acquired was £8.8 million, inclusive of £3.8 million for the debtor book at that time. However, due to internal issues and market headwinds, Thorite faced cash flow challenges and incurred operating losses estimated at £1.2 million by March 31, 2024. Flowtech’s board is optimistic that the strategic benefits and synergies will restore profitability within the first year of ownership, positively impacting group earnings.
To prioritise the integration of the new business and provide shareholders with detailed insights into the acquisition’s strategic benefits, Flowtech has rescheduled its half-year results announcement initially planned for September 10. The revised date will be confirmed by September 30, 2024.
Welcoming the acquisition, Flowtech CEO Mike England stated: “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. Adding Thorite’s expertise in pneumatics, automation, and compressed air capability is an excellent fit and aligns perfectly with our strategy, enhancing our scale, margin profile, and accelerating market share gains.”
Following the administration, Howard Smith and Rick Harrison from Interpath Advisory were appointed as joint administrators to Thomas Wright/Thorite Group. Smith emphasised the historical significance and reputation of Thomas Wright/Thorite Group, noting the preservation of the jobs of its 105 employees through the sale to Flowtech. Research analyst Sanjay Vidyarthi from Panmure Leberum maintained a ‘Buy’ recommendation on Flowtech’s stock, underscoring the acquisition’s potential to add substantial scale and drive stronger group margins through cost savings, cross-selling, and operational leverage in the medium term.
The acquisition of Thomas Wright/Thorite Group by Flowtech Fluidpower is poised to create significant business opportunities and operational efficiencies. This strategic move is expected to bolster Flowtech’s market presence, enhance its offerings, and drive profitability in the coming years.