Home improvement retailer Wickes has struck a deal to acquire control of a solar panel installation firm, as it also posted better-than-expected annual profits.
The London listed firm told shareholders it has agreed to buy a 51% majority stake in the parent company of solar installation company Solar Fast.
The deal will value Solar Fast, which focuses on solar panels as well as a smaller operation installing gas boilers, at up to £36 million.
Wickes said it will buy its stake based on a valuation of the company worth seven times its earnings for 2024.
The DIY products and building supplies firm will pay an initial £5.1 million once the deal is completed before the remaining payment in early 2025.
Wickes will also have the option to purchase the remaining 49% stake in the company over the next five years.
The move will expand Wickes further into the energy installation market, with plans to launch into air source heat pump installation further down the line.
David Wood, chief executive of Wickes, said: “The Wickes brand has been trusted by home improvers for over 50 years and with Solar Fast as part of our proposition we will be perfectly placed to support them with their energy saving plans.”
David Draper, founder and chief executive officer of Solar Fast, said: “This is tremendous news for Solar Fast.
“We’re a family business and our vision has always been to become the number one provider in the UK for quality domestic solar installations, and with the Wickes brand behind us, we are closer to achieving that vision.”
The deal came as Wickes revealed lower revenues and adjusted profits for the past year.
Total revenues were marginally down to £1.56 billion for the year to December 30, from £1.55 billion a year earlier.
The company benefited from strong growth in its TradePro business and increased demand for kitchens over the second half of the year.
Wickes also revealed adjusted pre-tax profits of £52 million for the year, which surpassed market expectations but were down from £75.4 million a year earlier.