Bin supplier Straight has acquired its leading injection moulding partner Dyro Holdings for £2.9m allowing Straight to manufacture its own bins for the first time.
Dyro, which trades as Powell Plastics, operates more than 20 injection moulding machines at its factory in Hull. It will be bought through an initial cash payment of £0.97m and then two further cash payments of £0.97m on each of the first and second anniversaries of completion.
Funding has been released through a £1.5m loan from the group’s lending bank Lloyd’s TSB. This loan will provide the first payment, while the balance will be found through cash generated as a result of the acquisition.
Up until now Straight had outsourced the manufacturing of its bins.
Straight chief executive Jonathan Straight said: “The evolution of our business model into direct production further strengthens our position in our core marketplace and will act as a springboard for further vertical integration, as well as future acquisitions.
“Our team has considerable experience in running manufacturing businesses at both board and management levels, and this will aid the speedy integration of Dyro into the Group. The board has plans to further develop its Hull site in line with the strategic goals of the Group.”
Straight’s trading with Dyro had been boosted in the past six months due to Straight’s wheeled bin production equipment it acquires when it bought the UK branch of bin manufacturer Helesi in March.
The acquisition will also see Straight moving further into the DIY sector because Dyro also supplies shelving and storage products to that sector, complementing the Group’s garden and hardware business. It expects to find cost-saving and cross-selling synergies from this.