Proposed £28m purchase of drain and maintenance services business
23 March 2017
Franchise Brands has announced its proposition to acquire drain clearance and maintenance services provider Metro Rod for a total consideration of £28m.
If successful, this will be the second acquisition since its previous initial public offering (IPO) in August 2016 for Franchise Brands, the multi-brand international franchise operation.
The business has a strategy of acquiring franchise businesses that will benefit from its central services, including marketing and the expertise of its board members and leadership team.
Metro Rod was founded in 1983 and provides its services on a largely reactive basis 24 hours a day.
It includes 40 franchisees around the UK and is one of a small number of businesses operating on this basis.
The company recorded system sales of around £32m in its last financial year and completed more than 130,000 tasks.
It was further reported that managing director Colin Davis will continue in his position at Metro Rod after the deal is completed.
Franchise Brands stated its belief that there is "substantial scope to accelerate Metro Rod's development as part of a group focused entirely on the development and growth of franchise businesses".
It further listed the potential to further develop local accounts, increase the number of national accounts and continue to expand the recently-launched Metro Plumb business, while extending the brand into more B2B sectors.
Franchise Brands has also released its end of year accounts for the 12 months ending 31 December 2016, recording a rise in total revenue of 11% to £4.87m, compared with £4.38m for the previous year.
Underlying profit had also increased by 11% to £1.24m.