13th May 2021 11:10
(Alliance News) - Essentra PLC on Thursday said its subsidiary, Essentra Overseas Ltd, has agreed to buy the business of Jiangxi Hengzhu Electrical Cabinet Lock Co Ltd.
Hengzhu is an access hardware manufacturer and distributor in China. The business operates from a single facility in Yichun, and has a workforce of 490 employees.
The Milton Keynes, England-based plastics foam products company said it will initially hold a 73% stake in a newly formed company that will buy Hengzhu, with the remainder held by the current principal owner of Hengzhu.
Closing of the transaction is subject to customary conditions, Essentra noted, including regulatory approval and incorporation of the new company, and is anticipated in the third quarter of 2021.
The initial consideration to be paid by Essentra is CNY100 million, about GBP11 million, which will be fully funded from existing facilities.
"This transaction strengthens our position in China, enabling us to expand our access hardware range. Hengzhu has excellent growth prospects and is a strong fit for the Components division," said Essentra Chief Executive Paul Forman.
"This transaction is earnings accretive and will deliver sustainable value to Essentra over the long-term," added Forman.
Essentra shares were trading 0.2% lower in London on Thursday morning at 305.50 pence each.
By Evelina Grecenko; [email protected]
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