Genuit Group Expands Sustainable Building Solutions with Davidson Holdings Acquisition

Genuit Group (LON: GEN), a UK provider of sustainable water, climate, and ventilation solutions, announced the acquisition of Davidson Holdings Limited for £49.0 million on a debt-free and cash-free basis.

The move is said to strengthen Genuit's portfolio within the sustainable building solutions sector, aligning with growing market demands for water conservation and efficient building technologies.

The acquisition brings prominent plumbing and heating brands, including Salamander Pumps, Cistermiser, Talon, and Keraflo, under the Genuit umbrella.

These businesses have established strong positions in the UK's Repair, Maintenance, and Improvement (RMI) sectors, serving both residential and commercial segments. Davidson Holdings is projected to generate £32.8 million in revenue for the full year 2025.

The £49.0 million consideration was funded using Genuit's existing debt facilities. Davidson Holdings will be integrated into Genuit's Sustainable Building Solutions (SBS) Business Unit, further expanding its reach and capabilities.

Acquisition Highlights:

• Expanded Portfolio: Increases Genuit's product offerings through merchant channels, targeting plumbing and heating engineers and commercial contractors. Synergies are expected through leveraging Genuit's existing routes to market and specification selling model.
• Operational Efficiencies: Deployment of the Genuit Business System (GBS) and leveraging Genuit's purchasing scale are expected to unlock productivity and cost synergies starting in 2026.
• Sustainability Focus: Davidson's portfolio includes water-saving products, aligning with Genuit's Sustainable Solutions for Growth strategy. Water conservation is increasingly important to developers, local authorities, and water utilities due to climate change.

Financial Highlights:

• The £49.0 million consideration represents 8.5x Davidson's EBITDA for the year ending April 2025.
• The acquisition is expected to be EPS accretive in the first full year of ownership, with an adjusted operating margin above 20%, in line with Genuit's medium-term target.
• Post-acquisition, return on invested capital (ROIC) is projected to exceed the weighted average cost of capital (WACC) in the second full year, excluding future synergies.
• Year-end leverage for 2025 is expected to be approximately 1.6x on a pro forma basis following the acquisition.

Davidson Holdings operates manufacturing sites in Sunderland, Reading, and Gillingham. Its brands are known for water-saving solutions, addressing increasing demand due to water scarcity and rising costs in buildings. While primarily serving the UK market, Davidson has a growing export revenue stream.

CEO Joe Vorih stated, “We are delighted to welcome our new colleagues to Genuit. Davidson is an excellent fit with the existing businesses within SBS, adding to our portfolio of strong brands alongside Polypipe, Manthorpe and Terrain.”

“This transaction…demonstrates the strength of our M&A pipeline”.