4th Jul 2022 08:10
(Alliance News) - Spirax-Sarco Engineering PLC on Monday said it has entered exclusive negotiations for the acquisition of a European industrial electric heating group.
The Cheltenham, England-based thermal energy management and pumping company is in talks to acquire Vulcanic SA from French private equity firm Qualium.
The consideration is EUR261.7 million, on a cash and debt-free basis, and would be financed through an acquisition bank facility.
Paris-headquartered Vulcanic is an industrial electric heating group, with 10 manufacturing facilities and 700 employees, mostly based in the Europe, Middle East & Africa region.
The acquisition would help to grow Spirax-Sarco's Electric Thermal Solutions business, through its existing customers, products and operations, which are also mostly based in the EMEA region. It will also complement its Chromalox business, which is mostly focused on the Americas.
"We have been following Vulcanic for some time and believe the acquisition represents an excellent opportunity to broaden our addressable market and further deploy our industry-leading technologies in Europe," said Chief Executive Nicholas Anderson.
"Vulcanic's existing strength and scale in Europe - with further investment by our group - will provide a fantastic platform for growth, especially for our recently launched portfolio of TargetZero solutions, which electrify heat generation for industrial processes to support our customers' decarbonisation objectives."
The firm expects the acquisition to be accretive to earnings within the year. Regulatory approvals in France and Germany are expected during the third quarter.
Shares in Spirax-Sarco were up 2.3% to 10,100.00 pence each on Monday morning in London.
In 2021, Vulcanic brought in revenue of EUR89.4 million, earnings before interest, tax, depreciation and amortisation of EUR17.6 million, and adjusted Ebit of EUR16.0 million.
It holds gross assets of EUR222.0 million.
By Elizabeth Winter; [email protected]
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