Diploma PLC Acquisition (4560R)
March 09 2016 - 2:00AM
UK Regulatory
TIDMDPLM
RNS Number : 4560R
Diploma PLC
09 March 2016
DIPLOMA PLC
12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX
TELEPHONE: +44 (0)20 7549 5700
FACSIMILE: +44 (0)20 7549 5715
FOR IMMEDIATE RELEASE
9 March 2016
DIPLOMA PLC
DIPLOMA ACQUIRES CABLECRAFT LIMITED FOR A MAXIMUM
NET CASH CONSIDERATION OF GBP26.0M
Diploma PLC, the international group of businesses supplying
specialised technical products and services, is pleased to announce
the acquisition of 100% of Cablecraft Limited ("Cablecraft"), a
group of businesses headquartered near Dunstable in the UK and
providing essential cable identification, management and
termination products and solutions to a broad base of primarily UK
based customers. This transaction will be immediately earnings
enhancing to the Group and will be reported as part of the Controls
Sector activities.
Cablecraft is a long established and leading supplier of cable
accessory products which are used to identify, connect, secure and
protect electrical cables. The business supplies to wholesalers,
distributors and end-users in a range of industries including
Electrical contracting, Control panel building, Rail and signalling
engineering and Energy & Utilities.
Cablecraft supplies products from leading branded manufacturers,
but also manufactures the Betaduct branded range of control panel
trunking from its Tewkesbury facility and manufactures heat
shrinkable sleevings and specialist thermal insulation products
from its facility in Plymouth. The Cablecraft group of businesses
employs 98 staff across its three locations in the UK.
Prior to acquisition, Cablecraft was owned by Christopher Jenart
and Ian King-Lee, joint Managing Directors and their immediate
family (Linda Jenart and Susan King-Lee). Both Christopher Jenart
and Ian King-Lee will remain with the business in their current
roles until at least 31 March 2017 to ensure a smooth management
transition.
Audited consolidated financial statements for the year ended 31
March 2015 reported that profit before tax for Cablecraft was
GBP3.5m on revenues of GBP15.4m; the remuneration of the Managing
Directors has largely been taken in the form of dividends, rather
than salaries. Gross assets at 31 March 2015 were GBP11.0m.
The initial net cash consideration to be paid on Completion will
be GBP21.0m, before acquisition costs, which will be met from the
Group's existing cash resources and revolving bank credit facility.
Deferred consideration up to a maximum of GBP5.0m will be payable
based on Earnings Before Interest and Tax achieved in each of the
12 month periods ending 31 March 2016 and 2017.
At Completion, net assets are expected to be ca. GBP10m,
including cash of ca. GBP6m and freehold property of GBP1.1m, which
will be sold to the vendors and leased back to the business. The
cash and the property proceeds will be included in the gross
consideration.
Bruce Thompson, Chief Executive of Diploma PLC said:
"The acquisition of Cablecraft is an exciting addition to our
Controls Sector. It supplies a range of essential products that are
similar to those supplied by the IS-Group but extends substantially
both the product range and the industrial end markets served. The
acquisition fits very well with Diploma's strategy of building a
larger, broader base of specialised businesses in the Controls
Sector. The acquisition also opens up opportunities for cross
selling products with Diploma's other Controls Sector
businesses."
+44 (0)20 7549
Diploma PLC - 5700
Bruce Thompson, Chief Executive
Officer
Nigel Lingwood, Group Finance
Director
+44 (0)20 7353
Tulchan Communications - 4200
David Allchurch
Martin Robinson
NOTE TO EDITORS:
Diploma PLC is an international group of businesses supplying
specialised technical products and services to the Life Sciences,
Seals and Controls industries.
Diploma's businesses are focussed on supplying essential
products and services which are funded by the customers' operating
rather than their capital budgets, providing recurring income and
stable revenue growth.
Our businesses then design their individual business models to
closely meet the requirements of their customers, offering a blend
of high quality customer service, deep technical support and value
adding activities. By supplying essential solutions, not just
products, we build strong long term relationships with our
customers and suppliers, which support attractive and sustainable
margins.
Finally we encourage an entrepreneurial culture in our
businesses through our decentralised management structure. We want
our managers to feel that they have the freedom to run their own
businesses, while being able to draw on the support and resources
of a larger group. These essential values ensure that decisions are
made close to the customer and that the businesses are agile and
responsive to changes in the market and the competitive
environment.
The Group employs ca. 1,500 employees and its principal
operating businesses are located in the UK, Northern Europe, North
America and Australia.
Over the last five years, the Group has grown adjusted earnings
per share at an average of ca. 15% p.a. through a combination of
organic growth and acquisitions. Diploma is a member of the FTSE
250 with a market capitalisation of ca. GBP850m.
Further information on Diploma PLC, together with a copy of this
Announcement, is available at www.diplomaplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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