SDI Group expands industrial footprint with acquisition of Collins Walker

In a move that broadens its exposure to the high-growth industrial electrification sector, SDI Group plc has acquired Collins Walker Ltd, a long-standing UK-based designer and manufacturer of electric boilers. The transaction, valued at approximately £1.85 million, will see Collins Walker integrated into Applied Thermal Control, one of SDI Group’s specialist subsidiaries under its Industrial & Scientific Products division. This strategic bolt-on acquisition marks SDI’s latest step in its acquisition-led growth strategy, aligning the company with accelerating demand for electric boiler systems in industrial applications.

The acquisition was funded through SDI’s revolving credit facility with HSBC UK Bank, reflecting the company’s continued reliance on structured, sustainable financing to fuel expansion without overleveraging its balance sheet. It also comes amid SDI’s wider effort to position itself in segments experiencing long-term regulatory tailwinds—most notably, the transition toward net zero emissions in industrial heating.

What does Collins Walker bring to SDI’s industrial strategy?

Founded in 1972, Collins Walker has established itself as a trusted provider of bespoke electric boiler systems for high-demand industrial clients across multiple sectors. Its product portfolio includes electrode and immersion element boiler technologies, designed to generate steam or hot water without reliance on fossil fuels. This makes the company a key player in the shift toward energy-efficient industrial heating, an area increasingly prioritised by manufacturers, healthcare providers, and commercial infrastructure developers worldwide.

Collins Walker’s core markets include brewing, distillation, pharmaceuticals, healthcare, and industrial processing, all of which require consistent and scalable thermal energy. The company’s boilers have found applications in everything from alcohol production facilities to distributed heating systems for large buildings. Notably, Collins Walker has built a blue-chip international customer base, underscoring its export capabilities and global relevance despite operating from a single site in Bedford, England.

For the financial year ending March 31, 2024, Collins Walker generated unaudited revenues of £0.94 million and earnings before interest and tax (EBIT) of £0.31 million. While these figures are modest in absolute terms, they highlight the company’s efficient cost structure and profitable operations—a rare attribute among smaller industrial manufacturers navigating inflationary supply chains and energy cost volatility.

How does Applied Thermal Control fit into the integration?

The newly acquired business will be integrated into Applied Thermal Control, a portfolio company within SDI’s Industrial & Scientific Products division. Applied Thermal Control focuses on advanced temperature regulation systems for laboratories and industrial processes, offering a synergistic platform for Collins Walker to scale operations.

The integration aims to achieve a dual objective: relieving Collins Walker’s current manufacturing constraints and expanding Applied Thermal Control’s portfolio with electric boiler technologies. Through shared back-office functions, consolidated procurement, and cross-selling opportunities, SDI expects to unlock operational efficiencies and boost margin performance across both businesses. In addition, SDI has indicated that further synergies may be realised through LTE Scientific, another group company that uses electric boiler systems in its autoclave manufacturing line.

This internal collaboration highlights a growing trend in specialist manufacturing: using targeted acquisitions to build vertically integrated supply chains that enhance resilience, speed to market, and revenue growth potential.

Why is the electric boiler market gaining investor attention?

The industrial heating landscape is undergoing a rapid transformation. As net zero mandates proliferate across Europe and beyond, traditional fossil fuel-based boiler systems are increasingly being phased out. The electric boiler market, once a niche within industrial infrastructure, is quickly becoming a focal point for capital allocation in clean energy transitions.

In 2024, the global industrial boiler market was estimated at $11 billion, with a subset electric boiler segment currently valued at approximately $255 million. Analysts forecast double-digit compound annual growth for electric systems due to their lower emissions, ease of installation, and compliance with tightening building and safety regulations.

Electric boiler systems not only align with decarbonisation objectives but also offer improved efficiency and lower maintenance compared to their gas or oil-fired counterparts. Industries operating in tightly regulated environments—such as pharmaceuticals or food and beverage manufacturing—are under particular pressure to demonstrate emissions compliance, making these electric solutions increasingly attractive.

SDI Group’s entry into this segment positions it at the intersection of industrial decarbonisation, energy efficiency, and long-term regulatory compliance—a triad that is reshaping global infrastructure and manufacturing investment priorities.

What does this mean for SDI Group’s stock and investors?

As of April 4, 2025, shares of SDI Group plc (LON: SDI) were trading at 49.50 pence, reflecting a 1.02% daily gain. Despite this slight rebound, the stock has struggled in recent months and currently sits near its 52-week low of 48.00 pence, recorded earlier in the same week. Year-to-date, SDI has declined by approximately 14.78%, amid broader market concerns over interest rates and mid-cap growth exposure.

However, insider activity has offered a positive signal. On the same day the acquisition was announced, Chairman Ken Ford purchased 100,000 shares at an average price of 50.39 pence, increasing his holding to 1.15% of total issued shares. This move is widely interpreted as a vote of confidence in the Group’s strategic direction, particularly as it targets high-margin opportunities through its acquisition pipeline.

Investor sentiment appears cautiously optimistic. The Collins Walker deal is expected to be earnings enhancing in its first full year, with additional upside from integration synergies. SDI’s disciplined financial strategy—bolstered by £10.3 million in undrawn credit facilities—supports further acquisitions without significant shareholder dilution.

With the stock trading at depressed valuations and the Group pivoting toward high-growth verticals like electric boiler systems, some market watchers view this as a potential entry point. That said, near-term performance will likely depend on how efficiently Collins Walker is integrated and whether the broader industrial segment continues to recover.

For current shareholders, the recommendation would lean towards a Hold—given the Group’s long-term vision remains intact, but execution risk persists. New investors may consider accumulating on weakness, particularly as the company’s exposure to regulatory-driven energy transitions becomes more visible in its earnings profile.

How does this acquisition align with SDI’s long-term strategy?

SDI Group’s acquisition strategy is rooted in a “buy and build” model, focused on acquiring profitable niche manufacturers in the scientific and industrial technology space. Over the past decade, this approach has enabled the Group to compound growth without major structural overhauls or risky pivot strategies. Each acquired entity is typically left to operate with a degree of autonomy while leveraging the Group’s shared services, financial oversight, and cross-divisional capabilities.

The addition of Collins Walker further strengthens SDI’s footprint in the clean energy-driven industrial equipment market, reinforcing its reputation as a consolidator of under-the-radar but high-performing manufacturing brands. The deal also deepens SDI’s relevance to global infrastructure trends, notably the push for greener thermal energy solutions in industrial and healthcare environments.

By anchoring its expansion in sectors experiencing favourable long-term dynamics—like the electric boiler market—SDI is creating a defensible portfolio that balances profitability with regulatory alignment. The company’s consistent capital discipline, coupled with steady insider buying and a clear integration roadmap, suggests a strategic direction aligned with both shareholder value and global decarbonisation goals.