Northern Bear plc, a building supplies and services company, has diversified its business with the acquisition of A1 Trucks and DJ McGough for GBP6.72 million (USD13.2 million).

A1 Trucks of Newcastle was established in 1983. It sells, leases, rents and maintains a fleet of about 400 forklifts. For the 12 months ended 30 April 2007, A1 Trucks had a turnover of GBP3.31 million (USD6.5 million) and pre-tax profit of GBP789,080 (USD1.6 million).

DJ McGough is a commercial and industrial plumbing, heating and mechanical services company established in 1988, with annual revenue of about GBP2.7 million (USD5.3 million).

According to The Journal, Northern Bear chose the established and profitable businesses to diversify from the new-build housing market and to insulate itself against the downturn in that sector.

The company's finance director, David Jay, told the Newcastle paper that the housing market will bounce back in the future and Northern Bear wants to be "in a good position when it does come back".

Northern Bear paid GBP4.67 million (USD9.2 million) for A1 Trucks, and founders Derek Wymes and Graeme Tennick will remain with the company.

"We will continue to look at businesses with strong cash flow and strong management," says Jay.

Northern Bear was established in 2006 and, according to its website, has a market capitalisation of GBP18.5 million. Its investment strategy is to grow "by acquiring well established, cash-generative buildings services businesses based in Northern England".

In 2007, the company acquired five businesses - Jennings Roofing (November), Hastie D Burton (June), Chirmarn Surveying and Chirmarn (both in May) and MGM (February).