Venture capital group ACT has taken a 20 per cent stake in Harold Engineering in a deal which values the company at about £3 million. The company, which imports and distributes engineering and garage equipment and compressed air systems, will use the £600,000 investment to fund expansion.
Managing director, Mr Derek Whelan, who has a 25 per cent stake, said that a number of potential acquisitions had been identified. "We have a target list but it is early days yet," he said. Harold is targeting smaller equipment distribution companies in the fragmented sector where there are a number of small companies. It is particularly interested in industrial and environmental control equipment distributors.
In addition Harold is considering developing a manufacturing operation.
Mr Whelan said the company was interested in manufacturing some of the equipment it imported.
In a strongly growing domestic market there were considerable opportunities for organic growth, he said. With an annual turnover of about £6 million, profits of just under £600,000 and no debt, Harold is in a strong position to raise further funds to support expansion. Turnover has been increasing at an average annual rate of 25 per cent over the past four years. With bases in Dublin and Galway, the company now employs 50 people.
ACT director, Mr Walter Hobbs, said Harold was an attractive investment opportunity for his venture capital group. Harold was operating in attractive sectors, he said.
