8th Feb 2007 07:00
Brammer PLC08 February 2007 Brammer plc FIN ACQUISITION BRAMMER ACHIEVES A MARKET LEADING POSITION IN POLAND Brammer, the European industrial services group, today announces the acquisitionof 51% of the business of the Fin S.A group and a commitment to acquire theremaining 49% between 2010 and 2012. Fin is one of the leading Polish specialistindustrial services businesses providing critical industrial components,bearings and related power transmission products. The acquisition is conditionalon clearance being received from the Polish competition authorities which isexpected within the next 3 months. The acquisition of Fin is consistent with Brammer's stated strategy, giving thecompany a leading market position in Poland in the provision of bearings, powertransmission, and fluid power products. The acquisition further reinforcesBrammer's leadership position in Europe and enhances its key account offering topan-European customers. Highlights The acquisition of Fin will enhance Brammer's position as a major pan-Europeanindustrial services business in one of the key growing industrial economies ofEastern Europe. Poland is currently enjoying GDP growth of approximately 5%. • Fin had net sales of £17.5 million in the year to 31 December 2006. • The agreement is for the acquisition of Fin in two tranches for a minimum consideration of £9.6million. • The consideration in respect of the first tranche is £4.9 million cash, and is payable on completion. Consideration in respect of the second tranche of between £4.7 million and £14.1 million is to be paid between 2010 and 2012. • The acquisition is expected to be earnings enhancing from completion. Brammer will announce its results for the year to 31 December 2006 on Tuesday 27February 2007. Profit before tax under IFRS for the year ended 31 December 2006is anticipated to be in line with management's expectations and slightly aheadof market consensus, at not less than £11.7m after a £0.2 million charge for theamortisation of acquired intangible assets. David Dunn, chairman of Brammer, commented: "We are delighted to announce the acquisition of Fin which further extendsBrammer's European market leadership. It strengthens our position in EasternEurope and gives us a base from which to grow earnings through greater marketpenetration in Poland, a key industrial economy. The acquisition fits ourstated strategy of acquiring quality businesses which closely fit Brammer'sestablished product portfolio and business strategy in order to complement theorganic growth opportunities in our key account and pan-European businesses." Enquiries: Brammer plc 0161 902 5572 David Dunn, Chairman Ian Fraser, Chief Executive Paul Thwaite, Finance Director Issued: Citigate Dewe Rogerson Ltd 020 7638 9571 Martin Jackson Nicola Smith Brammer plc Background to the acquisition of Fin S.A. Introduction Brammer, the European industrial services group, today announces the acquisitionof 51% of the business of Fin S.A. with a further commitment to acquire theremaining 49% subject to an earn-out by 2012. Fin is engaged in the provisionof critical industrial components including bearings, seals, power transmissionand fluid power products to a wide variety of industrial and commercialcustomers. Terms of the acquisition Brammer will acquire a 100% interest in Fin in two tranches. The first tranchewill be the purchase of 51% for which Brammer will pay £4.9 million in cash. Theacquisition remains conditional on gaining antimonopoly clearance from thePolish authorities which is expected by early May 2007. The second tranche willbe the purchase, between 2010 and 2012, of the remaining 49% for a minimumconsideration of £4.7 million. The consideration for the second tranche could beincreased up to a maximum of £14.1 million should certain agreed profit targetsbe achieved. For illustration, under the terms of the agreement, if profitgrowth were 10% per annum then the second tranche payment would be £7.8 million. Background on Fin The Fin business has 11 branches across Poland and 165 employees. The product range includes bearings, belts, couplings, motors and chains and isa good fit with Brammer's existing product portfolio. The Fin business generated unaudited sales and EBITDA of £17.5 million and £1.6million respectively in the year to 31 December 2006. Unaudited net assets were£3.7 million at the year end. Reasons for the acquisition The acquisition of the Fin business is in line with Brammer's strategy offurther developing its position as the leading pan-European industrial servicesbusiness through both organic growth and bolt-on acquisitions. The acquisition of the Fin business: • gives Brammer a leading position in the provision of bearings and mechanical power transmission in the strategically important and growing Polish industrials market; and • further enhances Brammer's key account and pan-European capabilities. In line with strategy, further acquisitions are being sought to consolidateBrammer's position as the only supplier capable of servicing the needs of majorpan-European customers for critical industrial components, bearings and relatedproducts. The Company intends to announce its results for the year end 31 December 2006 on27 February 2007. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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