27th Apr 2023 10:23
(Alliance News) - RS Group PLC on Thursday said it has acquired industrial products distributor Distrelec BV for EUR365 million.
The London-based industrial and electronics products distributor said the "complementary" acquisition "significantly" expands its continental European presence, particularly in Germany, Switzerland and Sweden.
Distrelec is a 's-Hertogenbosch, Netherlands-based high-service, digital-led industrial and maintenance, repair and operations product distributor, RS said.
The purchase is expected to increase RS revenue by about 40% in Germany, Austria and Switzerland, 80% in Scandinavia, and add scale in Italy, Belgium, Luxembourg, the Netherlands and Eastern Europe.
RS added that the overlap in the European supplier base and combined distribution network will improve the efficiency and customer experience of both companies, and reducing operating costs in procurement, logistics & warehousing, and marketing & administration, as well as increasing revenue due to cross-selling opportunities.
RS said it anticipates the acquisition to be accretive to adjusted earnings per share in the first full-year of ownership, and to "greatly enhance" RS's growth prospects.
Chief Executive Simon Pryce said: "Strategic acquisitions that are value creative is part of our strategy, and I'm pleased with what I've seen of our disciplined identification, assessment, valuation and integration processes. These have helped to drive good progress at Risoul since we acquired it in January 2023."
RS bought Mexican automation product distributor Risoul y Cia SA de CV for USD275 million.
Pryce added: "Distrelec is a complementary business to RS with excellent value creation potential under our ownership. It materially strengthens our presence in key European markets, there is a strong cultural and operational fit and there are significant potential soft and hard synergies from the combination."
RS shares were up 3.0% to 922.60 pence each in London on Thursday morning.
By Harvey Dorset, Alliance News reporter
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