Business
Acquisition and M&A Pipeline Update
Acquisition and M&A Pipeline Update.
About this update from Diploma Plc
[{"type":"text","content":"\n \n \n \n NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION\n \n \n \n \n \n \n \n \n \n 16 March 2023\n \n \n \n \n DIPLOMA PLC\n \n \n \n \n ACQUISITION AND M&A PIPELINE UPDATE\n \n \n \n Diploma PLC (\"Diploma\" or the \"Company\"), the international group distributing specialised products and services, is pleased to announce the acquisition of Tennessee Industrial Electronics, LLC (\"TIE\"), a market leading value-add distributor of aftermarket parts and repair services into the fast-growing US industrial automation end market, for ca. £\n 76\n million (the \"Acquisition\").\n \n \n Diploma has a proven track record of accelerating organic growth through acquisitions. In order to fund high quality acquisition opportunities from an active near-term pipeline, while maintaining our disciplined approach to leverage, we are today launching a capital raise of approximately 7.5% of the current issued share capital of the Company (the \"Capital Raise\"). The net proceeds of the Capital Raise will be used to refinance the acquisition of TIE as well as provide us with greater flexibility to execute on our M&A pipeline to accelerate future organic growth. Full details on the Capital Raise are set out in a separate announcement issued by the Company today.\n \n \n \n Strong trading performance\n \n \n \n The Group has strong trading momentum. During the first quarter of FY 2023 Diploma delivered very strong organic growth of 10% with the Group's revenue diversification strategy driving continued robust volume growth. Reported growth for Q1 was 30%, with a strong contribution from high quality acquisitions, and operating margin remained consistently strong at FY 2022 and FY 2021 levels. This performance builds on very strong results for FY 2022, in which the Group delivered organic growth of 15%, reported growth of 29%, and adjusted operating margin of 18.9%. \n \n \n The outlook for FY 2023 is positive and we have confidence in delivering another year of strong growth for Diploma, consistent with our full year guidance.\n \n \n \n Strategy: building high quality, scalable businesses for sustainable organic gro...