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Franchise Brands buys pumps, drainage company WPL Group

British vehicle repair company Franchise Brands PLC has acquired WPL Group Holdings Ltd. and its pumps and drainage units to support the group's Metro Rod Ltd. and Metro Plumb businesses, according to an Oct. 7 disclosure to the London Stock Exchange.

Franchise Brands said the initial consideration for the acquisition is £5 million, which has been paid with £4 million in cash and £1 million in shares.

An additional performance-based deferred consideration of up to £7.5 million is also payable by Franchise Brands to WPL over the next five years. The deferred consideration will be payable in cash, subject to Franchise Brands having the right to settle 20% of the amount due in new ordinary shares at the then-prevailing stock price.

Franchise Brands said the Willow Pumps business complements its Metro Rod and Metro Plumb operations and gives the company the strategic opportunity to expand the offerings of those two units.

"The longer-term aim of the group is to be able to serve our valued commercial customers with a 'water in, waste out' range of drainage, pumps and plumbing-related services on a national basis," Franchise Brands Executive Chairman Stephen Hemsley said.

Willow Pumps, which was established in 1992, recorded £12.4 million in revenue, £1.6 million in EBITDA and £1.1 million in profit before tax in 2018. In the first half ended June 30, the company generated £8.4 million in revenue, £1 million in EBITDA and £800,000 in profit before tax.

Franchise Brands said its board believes the Willow Pumps acquisition will be "significantly earnings enhancing" for the group.

Willow Pumps' founder and Managing Director Ian Lawrence will continue to manage the business following the deal. He will also become part of Franchise Brands' senior management team.

Willow Pumps will also continue to operate as a direct labor organization within Franchise Brands, working closely with Metro Rod and its franchisees.