Ambeon-linked ATX Partners, ARCASIA buy 58% stake of Alpha Fire

A consortium comprising ATX Partners and ARCASIA Investments and Trading Ltd., yesterday bought 58% stake in Alpha Fire Services (AFS) for over Rs. 220 million.

ATX and ARCASIA, which are also shareholders of Ambeon Capital PLC, equally acquired 25% stake each or 9.492 million shares at Rs. 10 per share. The other buyer was JBJ Holdings, who collected 3.15 million shares at Rs. 10 each.

Post-acquisition, ARCASIA holds 26.82% stake having held 0.68 million shares previously. ATX holds a 25% stake. 

AFS is an industry leader and among the preferred brands in Sri Lanka’s fire safety system installation services.

The sellers were AFS Directors S.V.A. Perera (11 million shares), M.C. Fernando (7.68 million shares), and A.S.I. Gunasekara (3.47 million shares). The adviser to the deal was Atarah Capital Ltd.

Overall, AFS saw 23.276 million of its shares change hands via 151 trades for Rs. 234.5 million. It closed the day at Rs. 13.10, up by Rs. 2.60 or 25% from its previous close.

AFS supplies, installs, commissions, and maintains fire alarm systems, fire hydrant systems, fire hose reel systems, sprinkler systems, fire flex systems, fire suppression systems, fire doors, kitchen hood fire suppression systems, fire extinguishers, and gas lines.



 Additionally, AFS provides design and consulting services for the installation of fire systems according to local fire authority and National Fire Protection Association (NFPA) standards and conducts fire training.

The company has enjoyed a revenue growth of 17% Compound Annual Growth Rate (CAGR) between 2021 (Rs. 185 million) and 2024 (Rs. 326 million). Its Earnings Before Interest, Taxes, Depreciation, And Amortisation (EBITDA) has grown from Rs. 10 million to Rs. 68 million. After-tax profit in 2024 was Rs. 42 million, up from Rs. 3.5 million in 2021. 

AFS, which is listed in the Capital Goods sector on the Colombo Stock Exchange (CSE), is closely related to the construction sector, which includes Central Industries, Alumex, ACL Cables, JAT, and Lanka Aluminium. AFS’s Price Earnings Ratio (PER) is 9.86 times as opposed to 38.71 times of Alumex and 11.10 of Lanka Aluminium, whilst others have a relatively lower PER figure.

AFS was founded by Frank Ryde in 1989 in Bahrain as a small business. In the same year, AFS established a business footprint in Sri Lanka. In May 2003, it was incorporated as a private limited company and was subsequently listed on the CSE in July 2022. AFS operates with a team of over 50 employees, including qualified and trained engineers and technical staff, working from the state-of-the-art workshop in Pannipitiya.

AFS holds top-tier status with CIDA EM1 (ICTAD) and has secured ISO 9001:2015 certification. The company is also a member of the NFPA in the USA. AFS offers an extensive range of solutions and maintenance services that meet international standards and quality. The combination of industry certifications, experienced and qualified engineers, and skilled workers underscores AFS’s commitment to serving its clientele.

According to Atarah Capital, AFS has a promising future with the expected growth in the construction industry in the future.

It said the construction industry in Sri Lanka is experiencing a resurgence as the country emerges from an economic crisis. The Sri Lankan economy grew by 5.3% in the first quarter of 2024, a significant improvement from the 10.7% contraction in Q1 2023, primarily due to advancements in industrial and service activities.

Sri Lanka’s construction industry is expected to register an average annual growth of 5.9% from 2024 to 2026, supported by investment in transport, renewable energy, housing, industrial zones, and tourism projects.

Atarah Capital noted that fire safety is crucial in Sri Lanka’s construction industry. The Factories Ordinance, No. 45 of 1942 mandates firefighting equipment and emergency exits in factories. Urban Development Authority (UDA) regulations require fire safety measures in buildings, such as alarms and sprinkler systems, especially in high-rise and commercial structures. Construction Industry Development Authority (CIDA) regulations ensure safety standards in construction practices.