Steel firm Billington is to expand with the £5m purchase of a new factory in Shafton, south Yorkshire.
Billington will take over Sherling Steel UK’s 25-acre site and will also acquire the steel fabrication and lifting equipment at the works.
Barnsley-based Billington said the acquisition will significantly increase the output of its structural steelwork divisions and it is looking to recruit a skilled workforce to run the operation.
The firm said that in the short term, the acquisition will give it access to new machinery and increased capacity.
After the deal completes, the facilities will be adapted for optimum production. Over the next three years, Billington believe the new facilities will significantly increase the output of its structural steelwork divisions.
The acquisition will be partially funded through the company’s own cash resources and partially from a commercial mortgage from its bankers, HSBC.
In June Billington had a cash position of £6.36m.
Billington has entered into a conditional agreement to acquire the 25 acre site from Sabler and said the site contains two industrial buildings with a combined useable area of 181,000 sq ft. The site is partially occupied by several long term tenants.
Billington has also entered into a conditional agreement to acquire equipment and other assets. The key assets are steel processing machinery and lifting equipment.
The group said the new Shafton site will complement its structural steel divisions in Barnsley and Bristol.
It said that once the deal is completed there will be a period of transition so it can recruit a workforce with the right skills.
Billington’s chief executive Mark Smith said: “It is an exciting period of change for Billington and one that the directors believe will further strengthen our position through increased capabilities, capacity and product offerings”.