Business
Acquisition of Chromalox for US$415 million
Acquisition of Chromalox for US$415 million.
About this update from Spirax Group Plc.
[{"type":"text","content":"\n \nRNS Number : 2974G Spirax-Sarco Engineering PLC 26 May 2017 \n\nSpirax-Sarco Engineering plc\n26th May 2017\nAcquisition of Chromalox for US$415 million (£319 million)\nSpirax-Sarco Engineering plc (Spirax Sarco), which specialises in the control and efficient use of steam, and in peristaltic pumping and associated fluid path technologies, announces that it has signed an agreement to acquire Chromalox, Inc. (Chromalox) from Irving Place Capital for a cash-free, debt-free consideration of US$415 million (£319 million). \nChromalox is a well-established USA based provider of electrical products, systems and solutions for industrial process heating and temperature management that we have been following since 2008. It serves a broad range of end markets with approximately 70% of sales being addressed via its direct salesforce, with the remainder going through distributors. Around two thirds of its sales are recurring revenue. It has five manufacturing facilities; three in North America, one in France and one in China. Chromalox is led by a strong, long-serving executive team who will remain with the business post acquisition.\nChromalox is closely related to the Spirax Sarco Steam Specialties business in delivering thermal energy management solutions to its customers through a primarily direct sales channel. Chromalox is also highly complementary to the Steam Specialties business, with the decision between using steam or electricity as a heating medium being driven by differing needs of the application or customer circumstances. As a result, Chromalox will expand our total addressable market by £2.1 billion to £7.9 billion. It will form part of the Spirax Sarco business group and be reported as a separate segment within that business.\nIn the year ended 30th September 2016, Chromalox recorded revenues of US$201 million (£155 million), EBITDA of US$43 million (£33 million) and EBIT of US$37 million (£28 million). In 2016, 78% of the company's revenues were in North America with 11% in Europe and 11% in Asia Pacific. At 30th September 2016, Chromalox's gross assets were US$185 million (£142 million). \nWe will invest in Chromalox to strengthen its direct sales channels globally; leverage our worldwide footprint to grow Chromalox's presence outside of its core m...