UK Heating Group

Deal summary

Established in 1998, UK Heating Group (UKHG) is the UK’s largest independent distributor of design-led radiators to the plumbing and heating merchant market. UKHG is the owner of The Radiator Company, Supplies4Heat and Clyde brands, each of them addressing a distinct and fast-growing part of the market.

The Radiator Company is UKHG’s leading established brand and addresses the affluent end of the residential radiator market, focusing on design, choice and service. Supplies4Heat and Clyde address the developer, trade and commercial segments of the market with a focus on value and service.

Encore Capital invested in the business in 2006, supporting the management buy-out by CEO Marcus Orchard and his team. Despite the tumultuous times in the building products sector following the global financial crisis, management succeeded in growing the business organically, as well as through acquisition and establishing UKHG as the preferred supplier of design-led radiators to the UK’s merchant market.

Encore Capital engaged Catalyst in 2016 to conduct a strategic review which culminated in a trade-focused sale process.

What difference did we make?

We conducted a preparation for sale assessment prior to the EU referendum alongside an anonymous, international pre-screening exercise, gauging prospective buyer appetite for M&A in the UK heating market.

The EU referendum-induced weakness in sterling meant best value would be achieved by focusing on those manfacturers that would be able to extract purchasing synergies. A small number of credible parties emerged, including the ultimate buyer, Irsap Group, a leading Italian manufacturer of heating and air-conditioning products. This is a strategic acquisition for Irsap Group as it previously did not have a foothold in the UK and Irish markets.

The acquisition of UKHG provides Irsap Group with a market-leading position on which to invest and grow the Irsap brand and product portfolio. We leveraged our Italian partner’s relationship with Irsap Group to access key shareholders and help them appreciate where they would be able to achieve synergies.

We ultimately negotiated an attractive deal for shareholders and management, achieving an acquisition EBITDA multiple of around 1.0-1.5x higher than typical multiples for comparable businesses in the sector.

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What our client said
"The team at Catalyst delivered on every level, at every stage of the transaction. They delivered best value for both shareholders and management. Every stage was superbly managed with incredible attention to detail. The support and advice they gave management throughout, including during the EU referendum, and even after completion, was nothing less than perfect." Marcus Orchard, Managing Director
UK Heating Group