7th May 2014 13:48
LONDON (Alliance News) - Trifast PLC Wednesday said it has conditionally agreed to acquire Viterie Italia Centrale Srl for EUR27.0 million, a deal that will boost its presence in the domestic appliance market, give it a broader manufacturing base in Europe to compliment its Asian factories, and the potential to push the Italian company's products into new markets.
In a statement, the industrial fasteners maker said it will pay about EUR24.2 million in cash for the Italian company and 3.0 million shares at five pence each. The deal is being funded through a new bank facility from HSBC, made up of a term loan facility of up to EUR25.0 million and a revolving credit facility of up to EUR10.0 million.
Trifast will pay an additional five euros for each euro in net profit the Italian company makes above a EUR3.0 million threshold in 2014. The maximum additional payment that can be paid is EUR5.0 million, it said.
Viterie Italia Centrale is 70% owned by Italian private equity firm DGPA, while Carlo Perini, the son of the founder owns the other 30%. It made revenue of EUR27.1 million in 2013 and pretax profit of EUR5.4 million. Customers of its customised self-tapping and thread-forming screws include Indesit, Whirlpool, Electrolux, Elica and BSH Bosch and Siemens.
"VIC operates as a manufacturer of highly engineered parts mainly to the domestic appliance industry plus early development into automotive lighting components; this capability will enable Trifast to offer a wider range of threaded fasteners manufactured within the enlarged group's facilities to these industry sectors, which we consider to be strategic for TR's global aspirations," Trifast Chairman Malcolm Diamond said in a statement.
"As a board, we believe that VIC offers an opportunity for growth not only within the European market, but also utilising our sales and marketing resource, to offer technical expertise in white goods components to manufacturers in Asia and the United States thus providing a strong strategic rationale matched by a compelling financial case," Diamond added.
Trifast reiterated its belief that its financial results for the year ended March 31 will exceed market expectations.
Trifast shares were Wednesday quoted at 103.50 pence, up 11.9%.
By Samuel Agini; [email protected]; @samuelagini
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