The Davis Service Group PLC (LSE: DVSG) has made two strategic acquisitions for a total of £44.5 million, including £2.5 million in deferred payments beyond 2010. The European dry cleaning and textile maintenance business has expanded its operations in Germany and Scandinavia with the deals.
The FTSE250 company bought the Norwegian and Swedish mat service businesses from Surrey-headquartered facility maintenance group ISS. The businesses had combined revenues of £12 million and gross assets of £6 million in 2009. As part of the deal, Davis agreed a strategic partnership with ISS to provide mat services to ISS' customer base across the Nordic region.
In Germany, Davis acquired the workwear business of Klarner which is based near Cologne. In 2009, the privately owned business had revenues of £10 million and gross assets of £5 million.
“Facility services and workwear are both higher growth sectors in Continental Europe, with Germany and Scandinavia being strategically important regions for us," Davis CEO Peter Ventress said, “Our excellent cashflow and strong balance sheet have enabled us to take advantage of these two opportunities to expand our market presence in these areas."
According to Davis, the acquisitions are already profitable and cash generative and the group has plans to increase both sales and margins. The group expects the deals to provide modest earnings enhancements during 2010 and to meet its return targets from 2011.http://www.proactiveinvestors.co.uk/companies/news/11904/davis-service-group-expands-european-operations-through-445m-strategic-acquisitions-11904.html
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