The deal is worth £6 million, comprising some £3 million in cash funded from Eleco’s existing resources with the balance satisfied by a placing of shares in the AIM-listed company.
The terms of the agreement include a deferred payment of £75,000, which is conditional on the financial performance of the acquired business in the year to January 2008.
Eleco also paid some £1 million for Milbury’s freehold manufacturing site in Lydney, Gloucestershire.
The deal expands Eleco’s Bell & Webster Concrete subsidiary. It also extends its geographic coverage and will enable it to target new markets such as the pre-stressed concrete sector.
Milbury’s managing director and co-founder Robert Honey remains with the business for six months as a consultant. The acquired business provides products to help prevent floods as well as storage tanks for the water and waste management industries. It also supplies products to build underground car parks and fire walls.
The company, which was established in 1978 and is headquartered near Bristol, reported turnover of £6.8 million with pre-tax profits of £900,000 in the nine months to October 2007.