Business
Acquisition
Acquisition.
About this update from Imi Plc
[{"type":"text","content":"\n \nRNS Number : 2970Z IMI PLC 14 December 2017 \n\n14 December 2017\n \nIMI plc (\"IMI\" or \"the Group\") \n \nIMI agrees to acquire Bimba Manufacturing Company (\"Bimba\") for US$198m\n \nIMI is pleased to announce that it has agreed to acquire Bimba, a market leading manufacturer of pneumatic, hydraulic and electric motion solutions with an extensive distributor network principally servicing the North American Industrial Automation market. Bimba will become an integral part of IMI Precision Engineering and the acquisition represents a significant strategic step for the division.\n\nTransaction highlights\n· The acquisition is fully aligned with the Group's strategy and is an excellent fit with IMI Precision Engineering.\n· Bimba will nearly double the size of IMI Precision Engineering's US Industrial Automation business providing market leading distribution and complementary products, with minimal overlap.\n· Plan to progressively move Bimba margins closer to those of IMI Precision Engineering.\n· The transaction will be earnings enhancing in the first full year of ownership with return on capital exceeding IMI's cost of capital within the first three years.\n \nThe transaction is fully aligned with IMI's strategy and fulfils its stated objective of increasing its US revenues while extending IMI Precision Engineering's presence in its core Industrial Automation segment. In particular, the acquisition provides the platform to accelerate IMI Precision Engineering's North American growth objectives by leveraging both Bimba's strong brand and its market leading US distributor network. The combination will also materially improve Bimba's profitability with margins expected to progressively move closer to those of IMI Precision Engineering as it adopts IMI's operational excellence programme.\n \nThe consideration for the transaction will be US$198 million (£148 million1) payable in cash on completion from existing bank facilities. In addition, IMI has set aside US$2.5 million for the purpose of staff retention. Completion is conditional on merger clearance and the approval by Bimba's employee stock ownership plan (\"ESOP\"), both of which are expected to take place in ear...