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Volution - Fantech deal drives shares £1 higher

November 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The shares have soared £1 since the start of August to a new high of 624p after Volution announced the acquisition of Fantech, a provider of commercial and residential ventilation solutions in the Australian and New Zealand markets. It cost an initial £113m, with a further non contingent payment of £30.8m due 12 months post completion, which makes it Volution’s largest acquisition to date. It looks a cracking deal. In the year to March ‘24, Fantech reported revenues of £90.8m and EBITDA of £17.1m, an 18.8% EBITDA margin. EV/EBITDA on the total consideration is just c8.4x and the acquisition will be earnings accretive immediately. Berenberg has lifted its FY26 eps numbers 16%. With headquarters in Melbourne, Fantech has a ra ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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