Birmingham-based Hill & Smith, the infrastructure, building and construction products group, has bought the galvanizing business of publicly quoted rival Metnor in a #6.5 million deal.
Metnor Galvanizing operates from a well equipped site in Chesterfield, Derbyshire, and benefits from having one of the largest galvanizing baths in the UK.
The annual turnover of the business is approaching #10 million and the plant employs around 100 people. All the existing management team and employees are remaining.
In the year ended December 31, Metnor's galvanizing business made an operating profit before group management charges and restructuring costs of #0.5 million.
Hill & Smith chief executive David Grove said: "The acquisition is a further demonstration of our commitment to investing in our core businesses. The deal will give us access to an excellent facility that is centrally located for the UK market.
"There will be real synergies with our other businesses and I am confident that Metnor Galvanizing will be an excellent fit with Hill & Smith."
Mr Grove said there were further specific benefits in terms of productivity.
"The size of Metnor's galvanizing tank means that large fabrications can be dipped just once, bringing extra efficiency and productivity.
"The deal fits in well with our strategy of selectively targeted complementary acquisitions matched by investment in product development and improving productivity.
"Including the Metnor Galvanizing deal, we have now invested #43 million in complementary acquisitions in the last four years as well as #34 million in other capital expenditure."
Hill & Smith paid #6.53 million for the share capital of Metnor Galvanizing, an amount which is subject to an adjustment on finalisation of the latter's completion accounts. The business has shown increased trading profits in the first half of 2006.
The group has also bought the freehold property from which the Metnor galvanizing business operates for #3.2 million from another company within the Metnor group.
The deal previously had been referred to the Office of Fair Trading, which eventually cleared it. Hill & Smith's product range includes safety barriers, wire rope vehicle restraints, street lighting columns and a whole range of other infrastructure and construction items.
It is one of the leading galvanizers in the UK, with extensive interests elsewhere in Europe and the US.
In the wake of record results for the first half of 2006, with a pretax profit growth of 28 per cent, the group has just successfully completed a #28 million fund raising through a placing and open offer.
Together with bank facilities, this has provided additional scope for acquisitions such as Metnor, organic growth and product development.