Member Article

Leeds-based Arctic Products acquired by Hayes UK after £1.2 million investment

Hayes UK, a supplier of specialist safety, testing and servicing products to the plumbing and heating industry has acquired Leeds-based Arctic Products.

Arctic Products is a wholesaler of plumbing and heating equipment and hardware.

Arctic has been acquired from Leeds based Volvox Group, and can trace its roots back to 1966 when it introduced the world to pipe freezing products.

It supplies organisations such as Wolseley, Travis Perkins and British Gas as well as hundreds of independent plumbing and heating merchants across the UK.

Hayes UK was established in 1998 and has operations in West Sussex and the North West. The business designs, develops and sources product utilising a supply chain which spans the UK and Far East.

With combined sales of over £5 million and a stable of trusted brands including Hayes, Arctic, ICEMAN, Sleepsafe, ph and Vortex, Hayes UK and Arctic will have the most comprehensive product range in the market and has ambitious plans to grow the business significantly including development into new product areas.

Export growth is also on the agenda with Hayes and Arctic already present in US, Canadian, Australian and French markets.

Lee Parsons will head up the combined business as executive chairman alongside Karl Dallimore of Arctic, who becomes managing director of the enlarged group.

Lee Parsons, executive chairman, commented: “Bringing Hayes UK and Arctic together creates an exciting and dominant force in the supply of niche consumable products to the heating and plumbing industry.

“We will extend our collective brands to new product areas and introduce over 200 additional products into our larger combined customer base.”

Karl Dallimore, managing director, added: “I am thoroughly delighted with the merger of Hayes UK and Arctic. Across the two businesses we have valuable and complementary brands, suppliers and customers and putting it all together under one roof gives us greater scope to continue the strong growth already being achieved by both units.”

The deal was structured and arranged by Baker Tilly Corporate Finance in Leeds with Jim Whittaker and Amy Lewis advising Hayes UK on the deal.

Jim Whittaker commented: “Hayes and Arctic are two successful growing businesses which, together, are a natural commercial fit. Lee and Karl share a combined vision of growth built on leveraging off the respective strengths of each business.”

The acquisition has been financed by Santander who provided funding through its Breakthrough Growth Capital Fund and Finance Yorkshire which invested development capital from its Equity Linked Fund.

Steve Harrison, director, Growth Capital, Santander, said: “For many businesses, mergers and acquisitions are key to unlocking and accelerating growth and Santander is thrilled to be supporting Lee and Karl in this way with Growth Capital Funding from our Breakthrough Programme to bring together the Hayes UK and Arctic businesses.”

Duncan Gray, investment manager, Finance Yorkshire, said: “Our Equity Linked Investment of £1.2m is significant in that it will enable Arctic to fund the working capital required to re-locate to larger premises in Yorkshire, expand capacity and support product development.

“Hayes UK and Arctic have successful track records and I look forward to working with management to further strengthen their position in the heating and plumbing sector.”

Stephen Roberts and Rebecca Grisewood of Gateleys acted as legal advisers to Hayes UK. Walker Morris (Peter Considine) advised Santander. Vincere (John Dewhirst) and Baker Tilly Tax and Accounting (Chloe Ellis) provided due diligence and tax advisory work respectively.

PwC (Stuart Warriner and Charlotte Tracy) and Squire Patton Boggs (Paul Mann and Jitesh Lad) advised Volvox Group.

This was posted in Bdaily's Members' News section by Clare Burnett .