STT Straight

 

TIDMSTT 
 
RNS Number : 0974R 
Straight PLC 
16 August 2010 
 

Date:                           16 August 2010 
On behalf of:               Straight plc ("Straight" or "the Group") 
For immediate release 
 
Straight plc ("the Group") 
 
* Acquisition of Dyro Holdings Limited 
 
Straight plc (AIM: STT), the environmental products and services group, is 
pleased to announce that it has acquired Dyro Holdings Limited ("Dyro"), its 
leading injection moulding partner, for a consideration of GBP2.9m. 
 
Dyro, which trades as Powell Plastics, is based at a factory in Hull and 
operates more than 20 injection moulding machines.  During the year ended 31 
December 2009, Dyro's turnover was GBP10.0m and profit before tax was GBP1.12m. 
GBP7.1m of this turnover was attributable to the Group in the same period. 
 
Straight has acquired the entire share capital of Dyro in a vertical integration 
move which will strengthen the Group's position in its core markets and also 
will form a platform for the Group's future development. 
 
The Board believes that the addition of Dyro's manufacturing capability will 
allow the Group to enhance overall profitability and fully exploit its market 
leading position. Dyro's location in east Hull, with its good road links and 
easy access to UK ports, will also provide the Group with a new UK distribution 
hub and an excellent base for its growing exports business. 
 
The consideration of GBP2.9m consists of an initial cash payment of GBP0.97m 
with two further cash payments of GBP0.97m on each of the first and second 
anniversaries of completion.  The initial payment has been funded through a loan 
of GBP1.5m from the Group's lending bank, Lloyds TSB. The deferred element of 
the consideration will be funded from cash generated as a consequence of the 
acquisition. The balance of the loan is being used to fund Dyro's working 
capital requirements.  Prior to completion of the acquisition, Dyro entered into 
a sale and leaseback agreement with the vendors on Dyro's property with an 
annual rent of GBP145,000. 
 
Dyro has been a supplier to the Group for a number of years.  During the last 
six months, trading with Dyro has increased considerably further to its hosting 
of the wheeled bin production equipment acquired by the Group from Helesi in 
March 2010. 
 
In addition to the products it manufactures for the Group, Dyro also has a 
proprietary injection moulding business which supplies shelving and storage 
products to the DIY sector.  These products are complementary to the Group's 
garden and hardware business and cost saving and cross-selling synergies are 
expected. 
 
The Board is pleased to report that good progress has been made by the Group 
towards the operational integration of the assets acquired from Helesi.  A 
number of customers have already been supplied with wheeled bins made by the 
Group in Dyro's factory.  The Group has also made good progress towards 
re-establishing the market share it enjoyed in wheeled bins prior to the closure 
of Helesi's UK factory in September 2009. 
 
 
Welcoming the news, Jonathan Straight, Chief Executive of Straight plc, said: 
 
"The evolution of Straight's business model into direct production further 
strengthens its position in its core market place and will act as a springboard 
for further vertical integration as well as future acquisitions. 
 
"Our team has considerable experience in running manufacturing businesses at 
both Board and management levels and this will aid the speedy integration of 
Dyro into the Group. 
 
"The Board has plans to further develop its new Hull site in line with the 
strategic goals of the Group." 
 
For further information, please contact 
 
+----------------------------------------+----------------------+ 
| Straight plc                           |                      | 
+----------------------------------------+----------------------+ 
| Jonathan Straight, Chief Executive     | 0113 245 2244        | 
+----------------------------------------+----------------------+ 
|                                        |                      | 
+----------------------------------------+----------------------+ 
| Cenkos Securities plc                  |                      | 
+----------------------------------------+----------------------+ 
| Ivonne Cantu/Christian Hobart          | 0207 397 8980        | 
|                                        |                      | 
+----------------------------------------+----------------------+ 
| Redleaf Communications                 |                      | 
+----------------------------------------+----------------------+ 
| Paul Dulieu / Mike Ward                | 0207 566 6709        | 
+----------------------------------------+----------------------+ 
 
Notes to Editors 
 
* Straight plc is the UK's leading supplier of specialist kerbside recycling 
containers as well as a key supplier of a broad range of waste and recycling 
container solutions. Founded in 1993 by the current Chief Executive, Jonathan 
Straight, the business has since supplied more than 12 million kerbside 
recycling boxes to local authorities across the UK, securing its position as the 
industry leader. 
* In 2005, Straight acquired Blackwall Limited, the UK's largest supplier of 
home composters and water butts. Through the Blackwall brand, Straight has 
delivered more than 3.5 million compost bins and water butts. 
* The business operates through two divisions. The core Trade Business supplying 
products in bulk to local authorities, utilities, the waste industry, retailers 
and other businesses and the Retail Business supplying a range of proprietary 
environmentally friendly consumer products directly to the public, often in 
partnership with a local authority or a utility. 
* In February 2009, Straight added to its portfolio with the acquisition of 
Harcostar Garden Products, a long established premium brand consisting of water 
butts, compost bins, watering cans and accessories. This has gained new 
distribution channels for the business in the UK and in Europe. 
* In March 2010, Straight acquired the business and certain assets relating to 
the UK manufacturing operations of Helesi plc, providing the Group with a 
proprietary wheeled bin range for the first time. 
* Straight plc has established diverse overseas sales channels and is now 
producing and selling water butts in Australia and North America. 
* Further information about the company and its products can be found at: 
www.straight.co.uk 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 ACQGGUMURUPUPGA 
 

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