On 1 October 2015, Trifast acquired Kuhlmann GmbH for a total consideration of €8.5m (£6.2m). Based in Verl, close to Bielefeld, Germany, Kuhlmann was founded in 1996 and employs 18 staff. It is a well-respected highly efficient distributor of industrial fastenings within the domestic German market. Its emphasis is on delivering high quality products and services to its well established longstanding customer base in the principal sectors of machinery and plant engineering, sheet metal processing and industrial. Kuhlmann's management team and previous owners, Frank Niggebrugge, Eric Hutter and Peter Henning, continue to run the business with the support of the operational management team and staff.
Reasons for acquisition
Germany is the biggest economy in Europe and the fourth biggest fastener market in the world. It is home to some of the world's largest multinational OEM headquarters across our main sectors, but specifically in automotive and domestic appliances. Being able to access this market for the first time with a local presence via our new German colleagues, has helped to put TR on the map in the region. In return, TR provides Kuhlmann with automotive experience (particularly on the quality compliance side), balance sheet strength and marketing support so together we can open up the German automotive market and grow more efficiently.
Performance so far
Since acquisition, Kuhlmann has performed very well and has generated £2.5m of revenue and £0.4m of underlying operating profit. Operating margins are very favourable, reflecting the efficient, cost-effective structure that already existed. Excellent co-operation has been developed between our new team in Germany and other TR locations, which has led to the development of the new business plans taking advantage of Kuhlmann's geography and the network of existing customers.
Plans for the future
To support our strategic growth plans, two additional people have been recruited extending the automotive sales team. Site visits have been made to a number of key targets and initial enquiries are beginning to come through. Against this increased investment, we are encouraged about the potential organic revenue growth for FY2017.
It is expected that the skill set of this experienced team will bring other benefits as time unfolds, especially in the area of technological applications and product solutions.
On 30 May 2014, the Group acquired the entire issued share capital of VIC for €32.0m (£26.1m). VIC is a manufacturer and distributor of fastenings systems. This acquisition significantly strengthened the Group's presence in the domestic appliances market, whilst also offering TR additional opportunities in the electronics and automotive sectors.
Performance so far
The 2016 financial year has been VIC's first full twelve months of trading within the Group, Over that time, VIC has recorded additional non-organic revenue of £4.0m as well as organic revenue growth at Constant Exchange Rate (CER) of 13.3%. These results have been ahead of our expectations and reflect strong growth with a number of our key multinational OEMs in the domestic appliances sector. July, October and November were all record months for VIC and the highest in the fifty-two year history of the Company.
Integration is well advanced with all key TR teams already aligned, with consistent processes and operations in place. Excellent results have been achieved from customer audits and a clear plan is in place to achieve TS16949 quality accreditation before the end of FY2017.
Plans for the future
Looking ahead, we continue to see growth opportunities at VIC. To support this, additional investment has been made to build on the sales, quality and engineering teams within VIC, whilst capital expenditure requests have also been approved to further develop our manufacturing capacity within Europe.
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