7th Jan 2014 09:29
LONDON (Alliance News) - Brammer PLC said Tuesday it has agreed to acquire Lonne Holding AS for an initial cash consideration of GBP19 million (NOK190.1 million) from its joint owners, Credo Invest and Terje Lonne.
The pan-European industrial maintenance, repair and product overhaul provider said that it will also take on an estimated GBP18.8 million (NOK188.1 million) in net debt on completion.
In addition, a deferred cash consideration of up to GBP8.0 million (NOK80 million) is payable based on a multiple of the increased earnings before interest, taxes, depreciation, and amortization over set targets for each of the years 2014, 2015 and 2016.
Credo Invest and Terje Lonne each own 50% of Lonne.
Brammer said the acquisition will be funded through borrowings from the group's existing facilities and is expected to complete by mid-January this year, becoming earnings enhancing during the course of the year.
The key focus of Lonne's product range is motors, inverters, bearings and power transmission. The company has 4500 active customers principally in Oil and Gas, Fisheries, Mining, Energy and Food processing, with customers serviced through a network of 15 branches and a Nordic central warehouse in Helsingborg, southern Sweden.
For the year ended December 31 2013, Lonne is estimated to generate revenues of NOK495.2 million, up on NOK492.0 million in 2012, and adjusted earnings before interest, taxes, depreciation, and amortization of NOK18 million, down on the NOK27.7 million reported for the previous year.
Brammer said the acquisition will support growth of its core distribution business as it provides the firm with a presence in the Nordic market, a number of cross-selling opportunities in Lonne's tools and general maintenance markets, and an increased opportunity to service its existing accounts in the Nordic region.
Ian Fraser, Chief Executive Officer of Brammer, said, "Lonne is an excellent strategic acquisition for the Group, providing us with the opportunity to enhance our position significantly in the Nordic region, an important growth market. We look forward to working alongside Lonne's highly experienced and knowledgeable team and through the support of Brammer's market leading pan-European distribution network, product offer and expertise we are well placed to leverage a number of cross selling opportunities, improve margins and drive the Lonne business forward."
Shares in Brammer were trading up 1.79% at 469 pence per share Tuesday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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