FAST-growing tool hirer Brandon Hire has made its biggest acquisition, with the £4 million purchase of the Delco (Delcommerce Contract Services) tool hire businesses of M&E specialist Emcor Drake & Scull.
The purchase of the firm is the biggest scalp this year for the Bristol-based hirer and is its ninth acquisition in 2004. According to chief executive Charles Skinner there are still two or three more smaller purchases in the pipeline this year.
The deal will also give Brandon its biggest sole supplier agreement - a four-year tool supply agreement for Emcor worth at least £8 million, based on current purchasing.The tie-up with Brandon's third million pound-plus customer is also the hirer's first exposure to the site accommodation business.
In the purchase price is a £0.3 million payment that will be triggered when Emcor hits annual buying volumes of £2 million with the hirer. It also includes an undisclosed degree of goodwill.
The deal provides the hirer with more extensive coverage in East Anglia, as well as branches in London, Hampshire and Manchester.The Delco workforce will transfer to Brandon, with the exception of financial controller Steve Last, who stays with Emcor, and managing director Vaughan West, who is retiring.
While the number of branches to be retained has yet to be finalised, the acquisition consolidates Brandon's third place in the tool hire league ahead of its results on Friday (September 10).
Mr Skinner said: 'There is now clear water between us and the chasing pack in terms of turnover.
'I think our interims will show that we are doing well.We have 124 branches and national coverage, so in the next 18 months we will be seeking to fill in gaps around urban areas.'
Brandon is clustering around built-up areas, he added, since it allows the company to optimise both equipment and personnel movements In line with Emcor's M&E focus, Delco has built up a tool hire fleet with a particular emphasis on that sector.
Net assets amounted to £1.7 million and operating profit was £800,000.
Mr Skinner said the deal, which was nine months in the planning, would also have a cumulative impact on the business.
He added: 'We hope it will help us attract major customers if we show that we can look after the interests of big firms.'