6th Sep 2005 07:03
Brammer PLC06 September 2005 FOR IMMEDIATE RELEASE 6 September 2005 Brammer plc MHBH ACQUISITON BRAMMER ACHIEVES MARKET LEADERSHIP IN THE CZECH REPUBLIC Brammer, the European industrial services group, today announces the acquisitionof 51% of the business of MHBH a.s., with a commitment to acquire the remaining49% between 2008 and 2009. MHBH is a privately owned Czech specialist industrialservices business engaged in the provision of critical industrial components,bearings and related products. The acquisition of MHBH is a strategic advance for Brammer, furtherconsolidating its position as Europe's leading provider of bearings, powertransmission and fluid power components and expanding its presence in thegrowing industrial markets of Eastern Europe. Highlights • The acquisition is expected to be earnings enhancing in the first full year of ownership. • The acquisition of MHBH's business will enhance Brammer's position as a major pan-European industrial services business in the key industrial economies of Germany, the UK, France, Spain, Benelux and now the Czech Republic. • Consolidation of MHBH with Brammer's existing businesses will bring significant commercial and synergistic and working capital benefits to MHBH and to the group. • MHBH improves Brammer's base for growth in Eastern Europe which is benefiting from the re-location of manufacturing to lower cost economies. • The contract allows for the acquisition of the business of MHBH in two stages, for a total consideration estimated to be in the range of £3.2 million to £3.8 million with an initial cash payment of £1.5 million. MHBH generated sales of £6.7 million in the year to December 2004. David Dunn, chairman of Brammer, commented: "The acquisition of MHBH extends further Brammer's European market leadership.It consolidates our position in Eastern Europe and gives us a base from which togenerate earnings growth through further market penetration." Enquiries: Brammer plc 0161 902 5599 David Dunn, Chairman Ian Fraser, Chief Executive Paul Thwaite, Finance Director Issued: Citigate Dewe Rogerson Ltd 020 7638 9571 Martin Jackson Anthony Kennaway Brammer plc Background to the acquisition of MHBH Introduction Brammer, the European industrial services group, today announces the acquisitionof 51% of the business of MHBH a.s., with an commitment to acquire the remaining49% on an earn-out basis by 2009. MHBH is engaged in the provision of criticalindustrial components including bearings, seals and power transmission products. Terms of the acquisition Brammer will acquire, a 100% interest in MHBH in two stages. The first stagewill be the purchase of 51% effective from 6 September 2005 for which Brammerwill pay £1.5 million in cash. The second stage will be the purchase, by 2009 of the remaining 49% for aconsideration in the range £1.7 million to £2.3 million. Background on MHBH The MHBH business has 11 branches and 61 employees. The product range includes bearings, quick-couplers, belts, tools and pumps. TheMHBH business generated sales and pre-interest profits of CzK 290.3million (£6.7million) and CzK 23.9 million (£0.6 million) respectively in the year to 31December 2004. Net assets were CzK 85.0 million (£2.0 million) at the year end. Background to and reasons for the acquisition The acquisition of the MHBH business is a further step in Brammer's strategy ofbeing the leading pan-European industrial services business. The acquisition of the MHBH business: • improves Brammer's position as one of the leading pan-European industrial services businesses with access to the economic and commercial advantages that this will bring. It complements Brammer's existing European businesses and can be absorbed seamlessly into that network whilst enhancing Brammer's position in the Czech market; • gives Brammer a significant and unique ability to serve the growing number of international customers who wish to source industrial components on a pan-European basis, including the lower cost economies of Eastern Europe. The acquisition therefore provides an enhanced platform for further growth of Brammer's corporate account business. Further bolt-on acquisitions are being sought to consolidate Brammer's positionas the only supplier capable of servicing the needs of major pan-Europeancustomers for critical industrial components, bearings and related products. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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