Thursday, September 22, 2016

News: Plasflow owner in MBO

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SWP, the AIM-listed group that operates the Plasflow business in Rotherham, is to go back into private ownership after the board accepted an offer worth £18.3m from the management team.

Based in Cambridgeshire, SWP Group Plc designs, manufactures and installs a range of industrial engineered products and systems, serving international markets in the oil, gas and petrochemical markets as well as in construction and water utilities.

Its Plasflow subsidiary, based at Canklow Meadows, offers specialist services in the fabrication of large diameter plastic pipe work and supplies the UK civil nuclear sector. It delivers the fabrication needs of Fullflow, another SWP subsidiary based in Sheffield that specialises in rainwater management and syphonic drainage systems.

Friars 716 Ltd, a new company established by SWP's management team, has made an offer to purchase SWP Group which will see shareholders receive 9p for each share, valuing the business at about £18.3m.

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An update to the stock exchange said: "Friars intends, upon the Offer becoming wholly unconditional and subject to Friars then owning 75% of the SWP Shares, to take the necessary actions to cancel the admission to trading on AIM of the SWP Shares and re-register SWP as a private limited company."

For the year ended June 30 2015, SWP made a profit after tax, but before discontinued activities of £1.7m and a loss of £0.4m after discontinued activities.

Relying on projects, Plasflow has performed well in recent years but has suffered recently due to the absence of any meaningful orders from the nuclear sector where the company is a respected player in providing pipe solutions for most of the major nuclear plants in operation throughout the UK.

The company was programmed to commence substantial works for EDF but delays to its massive nuclear investment at Hinkley Point have had knock on effects. EDF, unilaterally deferred, for up to two years, a major outage project at one of their UK plants where Plasflow was scheduled to play a prominent role.

Alan Walker, chairman of Friars, said: "SWP is too small to benefit from maintaining a public quotation and AIM has not provided SWP's shareholders with sufficient liquidity, with some feeling trapped. As a private company, SWP will be better able to weather the feast and famine nature associated with transacting a small number of large projects. I therefore believe that the Offer is in the best interests of shareholders as a whole and I look forward with great optimism to working with all stakeholders to continue the successful development of the business."

Alan Smith, independent director at SWP. added: "I am pleased to recommend this offer to shareholders of SWP. The principal operating companies of SWP, being Fullflow and Ulva, are profitable and, in my opinion, well regarded by their peers and customers. However, it is my opinion that the market capitalisation of SWP does not reflect either its financial progress or the continued efforts of my colleagues and that SWP's public quotation is no longer beneficial to its stakeholders, particularly given the very low levels of liquidity in the Company's shares. The offer from Friars gives shareholders a chance to realise value from their investment at a significant premium to the recent share price, while safeguarding the existing employment rights of SWP employees."

SWP Group plc website
Plasflow website

Images: Plasflow


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