Straight buys Helesi's UK arm for £1.65m

Leeds-based Straight said the deal will give it its first branded wheelie bin.

Both companies expect to work together on the development of new products using Straight's expertise and Helesi's technical know-how.

Straight said the opportunity came up to buy the majority of Helesi's UK business after the Greek company decided to stop manufacturing in the UK and move to Northern Greece and Italy.

It is buying Helesi's order book and certain assets, but not Helesi's warehouse in Bradford.

Straight has supplied Helesi wheelie bins for some time and the brand name has a good reputation in the UK.

The company believes it can make better margins if one of its manufacturing partners makes the wheelie bins instead of buying them from Helesi.

Both brand names will continue and Straight is expected to use the tagline "Helesi wheelbins by Straight". It will pay an ongoing royalty to use the Helesi name.

Straight will assume Helesi's position supplying the UK and Irish markets as well as taking over existing customer contracts and supply agreements.

The 1.65m payment consists of an initial 450,000 payment, a further 450,000 on completion and the balance will be paid in ten monthly instalments.

Straight's chief executive Jonathan Straight said: "We have been a distributor of Helesi products in the UK for a number of years and our customers have always been very satisfied with their high quality.

"We are delighted that we are now able to service these markets with a proprietary product, manufactured locally and in line with our proven model which prides itself on quality, innovation and market leadership."

Helesi's tooling and two pressing machines will be transferred from its premises in Bradford to Straight's manufacturing partner in Hull.

Analysts at Panmure Gordon said: "In our view this deal has the potential to be incremental to 2011 estimated earnings."

Straight has embarked on an ambitious acquisition strategy over the past few years, vacuuming up or edging out competitors.

The company was established in 1993 by Jonathan Straight. It listed on the Alternative Investment Market in 2003 and acquired its main competitor Blackwall in 2004 for 6.75m.

In August 2007 it bought chewing-gum bin company Gummy Bins for an undisclosed sum.

Last January it bought Harcostar Garden Products for 400,000, which traded in the UK and Europe. Harcostar is a long-established premium brand which supplies water butts, compost bins, watering cans and accessories.

At the end of last year Straight started manufacturing in the US in order to service North American customers.

The group is the UK's leading supplier of specialist kerbside recycling containers as well as a key supplier of a broad range of waste and recycling container solutions.

It has supplied more than 12 million kerbside recycling boxes to local authorities across the UK, securing its position as the industry leader.

Earlier this year it reported a sharp rise in orders which will boost trading in 2010.

Mr Straight said the group had taken orders at "unprecedented levels" in the last three months of 2009 which would place it in a "strong position" for 2010.

Straight has transformed itself over the past few years, pulling out of non-profitable products which were sold to the public and refocusing on contracts with local councils.

Group turnover for the year to December 31 was 11 per cent higher at over 28m.

Straight's Trade business has continued to grow with significant revenue increases in both its core municipal and non-municipal divisions.

Cancer research charity choice

Straight has adopted Yorkshire Cancer Research as its charity partner for 2010.

The group hopes to raise more than 10,000 for the charity by donating 10p from every sale of its best selling Compost Converter bin.

It has also adopted Yorkshire Cancer Research's newest mascot – the Clangers – and will feature them as part of its local authority home composting campaigns.

Last week Straight's chief executive Jonathan Straight met Prof Phil Quirke, a Yorkshire Cancer Research-funded scientist, for the launch of the partnership.

The Clangers, created by the late Oliver Postgate and Peter Firmin, tie in well with Straight as the children's TV creations are experts in recycling all manner of useful materials.