Business
Replacement: Acquisition of Ellison Surface Tech
Replacement: Acquisition of Ellison Surface Tech.
About this update from Bodycote Plc
[{"type":"text","content":"\n \nRNS Number : 9529X Bodycote PLC 24 December 2019 \n\nThe following amendments have been made to the 'Acquisition of Ellison Surface Technologies ' announcement released on Tuesday 24 December 2019 at 7.00am under RNS No 9503X\n \nThe tax benefits and net consideration figures in paragraph 3 were incorrectly denominated in £ rather than $.\n \nAll other details remain unchanged.\n \nThe full amended text is shown below.\n \n \n \n24 December 2019\n \nBodycote plc\n \nAcquisition of Ellison Surface Technologies\n \nBodycote, the world's leading provider of heat treatment and specialist thermal processing services, has entered into an agreement to acquire Ellison Surface Technologies ('Ellison'), creating one of the world's largest providers of thermal spray and engineered coating surface technology services to the aerospace industry.\n \nEllison's business, based in North America, is highly complementary to Bodycote's existing Surface Technology business. It is primarily focused on the aerospace market. It will be integrated into Bodycote's surface technology and aerospace business, which itself has seen strong structural growth in recent years.\n \nGross consideration for the acquisition will be $200 million (£154 million). When adjusted for tax benefits worth at least $30m, net consideration for the transaction is approximately $170 million (£131 million). The consideration will be settled using Bodycote's existing committed credit facilities.\n \nEllison's business generated revenues of $50m (£38m) in 2018, with associated pro-forma EBITDA of $8m (£6m). Based on results year to date, it is anticipated that Ellison's revenue for 2019 will be $58m (£44m) with pro-forma EBITDA of $12m (£9m). This expected revenue growth of 16%, and its associated 50% increase in pro-forma EBITDA, reflects the fact that Ellison has been successfully gaining share in the civil aviation business, which will also provide a solid foundation for further revenue and profit growth in future years. It is anticipated that the Ellison business will be immediately earnings enhancing to the enlarged Bodycote business. Ellison employs almost 400 people across six sites located across the United States, Canada and Mexico.\n \nCommenting on the transaction, Stephen Harris, Group Chief Exe...