Kettle safety and water filter technology company Strix has entered conditional agreements to acquire Billi Australia, Billi New Zealand and Billi UK for £38m on completion, it announced on Wednesday, on a debt- and cash-free basis subject to customary closing adjustments.
The AIM-traded firm said the consideration would be funded through a new term loan, adding that it was undertaking an equity placing to maintain an appropriate level of leverage after the acquisition.
It described Billi as a “leading” Australia-based brand supplying “premium” filtered and non-filtered instant boiling, chilled and sparkling water systems.
Strix said it expected its net debt as at 31 December to be about 1.9x its 2022 pro forma adjusted EBITDA, with “strong” deleveraging thereafter to 1.4x by the end of 2023.
In the 12 months ending 31 December, Billi is expected to generate revenue of £43.7m and adjusted EBITDA of £10.2m.
The company said Billi had a “successful history” of growth, with double-digit revenue compound annual growth rate over the past five years, and was “highly cash-generative”, delivering cash conversion of 88%.
Strix said the acquisition would “materially accelerate” the trajectory of, and would be accretive to, its medium-term targets, with the targets now expected to be reached ahead of the initial 2025 timeframe.
“We are delighted to enter this agreement to acquire Billi, a leading multifunctional taps manufacturer and distributor,” said chief executive officer Mark Bartlett.
“Billi accelerates our strategy within our Water and Appliances categories which is core to Strix’s five year plan.
“We look forward to welcoming the Billi team to the Strix Group and working together to grow our combined businesses.”
At 0902 BST, shares in Strix Group were down 3.76% at 123p.
Reporting by Josh White at Sharecast.com.