SPX Spirax-sarco Engineering Plc

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RNS Number : 1558R

Spirax-Sarco Engineering PLC

04 July 2022

News Release

4 July 2022

Exclusive negotiations to acquire Vulcanic for EUR261.7 million

Spirax-Sarco Engineering plc, the thermal energy management and niche pumping specialist, announces that it has entered into exclusive negotiations with a view to acquire the Vulcanic Group of Companies (Vulcanic) from Qualium, a French private equity company, for consideration of EUR261.7 million (GBP225.5 million) on a cash and debt free basis, subject to customary closing adjustments.

Vulcanic is a European industrial electric heating group, established in 1973, and is the largest supplier in Europe of bespoke industrial electric heating solutions. Vulcanic is headquartered in Paris, France, with 10 manufacturing facilities worldwide and over 700 employees, of whom almost 90% are based in the Europe, Middle East and Africa (EMEA) region.

Vulcanic will support the delivery of growth in the Group's Electric Thermal Solutions (ETS) Business through its existing customers, products and operational footprints which are mostly in the EMEA region and will complement our existing Chromalox Business which is mostly focused on the Americas region. Vulcanic operates a direct sales model to end users and Original Equipment Manufacturers, as well as contractors, and serves a range of markets aligned to the core market sectors of ETS.

Vulcanic's strategic fit with ETS expands the platform to deploy the Group's business model and drive further improvements in sales growth and margin over time. As part of ETS, Vulcanic will play a significant role in supporting the Group's drive to help customers decarbonise their critical industrial processes through electrification, for which there is already strong demand from European customers. The acquisition of Vulcanic is expected to be accretive to Group earnings in 2022.

Upon completion of information and consultation procedures with employee representatives, the transaction will require certain regulatory approvals in France and by the merger control authority in Germany. These conditions are expected to be satisfied during the third quarter of this year. The consideration will be financed through an acquisition bank facility.

Nicholas Anderson, Group Chief Executive, Spirax-Sarco Engineering plc, said: "We are looking forward to welcoming colleagues from Vulcanic into our Group. 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. 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."

Financial Information for Vulcanic

In the year ended 31st December 2021, Vulcanic recorded revenues of EUR89.4 million (GBP76.8 million), earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR17.6 million (GBP15.2 million) and earnings before interest and tax (EBIT) of EUR16.0 million (GBP13.8 million) on an adjusted pro-forma basis. On an audited basis EBIT was EUR14.1 million (GBP12.1 million). As at 31st December 2021, Vulcanic's gross assets were EUR222.0 million (GBP186.8 million), including goodwill from previous Vulcanic acquisitions.

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Enquiries:

Nimesh Patel, Chief Financial Officer

Andrew Guthrie, Head of Investor Relations

Tel: +44 01242 535035

About Spirax--Sarco Engineering plc

Spirax--Sarco Engineering plc is a thermal energy management and niche pumping specialist. It comprises three world--leading Businesses: Steam Specialties, for the control and management of steam; Electric Thermal Solutions, for advanced electrical process heating and temperature management solutions; and Watson-Marlow, for peristaltic pumping and associated fluid path technologies. The Steam Specialties and Electric Thermal Solutions Businesses provide a broad range of fluid control and electrical process heating products, engineered packages, site services and systems expertise for a diverse range of industrial and institutional customers. Both Businesses help their end users to improve production efficiency, meet their environmental sustainability targets, improve product quality and enhance the safety of their operations. Watson--Marlow provides solutions for a wide variety of demanding fluid path applications with highly accurate, controllable and virtually maintenance-free pumps and associated technologies.

The Group is headquartered in Cheltenham, UK, has strategically located manufacturing plants around the world and employs more than 8,700 people, including almost 2,000 direct sales and service engineers. The Company's shares have been listed on the London Stock Exchange since 1959 (symbol: SPX) and it is a constituent of the FTSE 100 and the FTSE4Good indices.

Further information can be found at www.spiraxsarcoengineering.com

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