Oldham-based consumer goods firm Ultimate Products has agreed to buy buy kitchen and bathroom scales maker Salter Brands from FKA Brands for an initial cash consideration of £32 million.

A further deferred £2 million is payable in cash in four tranches over 24 months from completion of the acquisition.

To help fund the deal, Ultimate Products has conditionally raised £15 million by selling shares in a placing at £2.10 per share.

Ultimate Products’ shares rose about 5% to around £2.25 on Friday.

The new ordinary shares, when issued, will represent 8% of the company’s issued ordinary share capital as enlarged by the fundraise. Ultimate Products’ shares have risen more than 200% over the past 12 months.

Ultimate Products CEO Simon Showman said: “We are delighted with the level of support that we have received from our existing institutional shareholders for this fundraise, and to be welcoming a number of new institutions to our register.

“It is also particularly pleasing that retail investors have been able to participate.

“The net proceeds will be used to fund our proposed acquisition of the historic Salter brand, for which we see significant potential as part of our strong portfolio of value focused consumer goods brands.”

On the acquisition, Showman said: “Salter is an historic brand with an outstanding heritage and a fantastic reputation for producing high quality homeware products.

“As such, it will enhance and diversify our existing exceptionally strong portfolio of value‑focused consumer goods brands.

“We already have a close relationship with Salter and its customers as a result of our long-standing licensing arrangement and we look forward to growing the brand further both in the UK and internationally in the coming years.”

On current trading, Ultimate Products said: “The board anticipates that its performance in FY21 will be in line with current expectations, with revenues forecast to be in excess of £133 million (FY20 – £115.7 million).

“While the group has seen an increase in shipping rates, the board nevertheless currently expects that underlying EBITDA for FY21 will be in excess of £13.0 million (FY20 – £10.4 million) with underlying profit before tax in excess of £10.8 million (FY20 – £8.2 million).”