14 November 2014
IMI plc ("IMI" or "the Group")
IMI announces acquisition of global power valve specialist Bopp & Reuther
IMI announces the proposed acquisition of B&R Holding GmbH ("Bopp & Reuther") for an enterprise value of €152.6m (£120m1). Bopp & Reuther will become part of IMI's Critical Engineering division. In the calendar year 2013, its revenues were €90m and EBITDA was €11.2m with an improved performance expected in 2014.
Bopp & Reuther is very closely aligned with IMI Critical Engineering's existing large control valve business ('CCI') and therefore we expect to deliver synergies of approximately €9m from the combination of the companies by the end of 2017.
In addition, the transaction will:
- significantly enhance IMI's presence in the growing power sector;
- extend the Critical Engineering division's existing product range to include complementary semi-severe valve products and technologies which will increase the division's current addressable market;
- increase exposure to emerging markets in particular China and India where the power markets are forecast to grow 5% to 7% per annum over the next five years;
- provide access to new higher margin aftermarket opportunities from Bopp & Reuther's existing installed base;
- create further opportunities to increase efficiencies and competitiveness through the implementation of lean and operational improvement programmes; and
- be earnings accretive in 2015 and return on invested capital is expected to exceed the Group's weighted average cost of capital by the end of 2017.
Commenting on the acquisition Mark Selway, Chief Executive of IMI said:
"The strategy for our Critical Engineering division is all about focus and growth and this acquisition provides a meaningful addition to our capabilities. It gives us critical mass in the power sector particularly in the faster growing geographies of China and India. It also expands our product portfolio, enabling us to offer customers complete valve packages and Bopp & Reuther's existing installed base gives us access to a bigger aftermarket opportunity."
Roy Twite, Divisional Managing Director, IMI Critical Engineering added:
"Bopp & Reuther represents an important and entirely aligned addition to Critical Engineering's portfolio of operations. Its products, markets and customers are well understood across CCI and the increased geographic sales distribution and productivity benefits we bring will help accelerate Bopp & Reuther's growth ambitions."
Bernard Engel, Chief Executive of Bopp & Reuther commented:
"We are delighted to be combining forces with IMI and see tremendous scope to expand Bopp & Reuther's access to customers and geographies beyond our current reach. IMI's proven capabilities, including the application of lean and project management processes, will enhance our current offering and further strengthen Bopp & Reuther's competitive market position."
Bopp & Reuther, which is recognised as a leading global control valve producer, is based in Germany. It specialises in the design and manufacture of control and safety valves for the power generation industry. Its product portfolio includes both configured and semi-severe valve technologies and in recent years it has extended its geographic reach and has a large customer base across China, India and Korea. The company is privately owned and, following the acquisition, Bernard Engel and the management team will remain with the business.
The consideration for the acquisition is payable in cash on closing and will be funded from the Group's existing bank facilities. Completion is subject to merger clearance and is expected to occur around the end of the year.
A conference call for analysts and investors will be held at 08:30 GMT to discuss this statement and the Interim Management Statement issued separately today. To access the call, please dial +44 (0) 1452 555 566 Toll Free (UK) 0800 694 0257 - Conference Call id: 21256779#.
Enquiries to:
Will Shaw IMI Tel: +44 (0)121 717 3712
Suzanne Bartch / StockWell Communications Tel: +44 (0)20 7240 2486
Rob Morgan
1 For the purposes of this press release we have assumed an exchange rate of 1 GBP = 1.27 Euros.
Notes to editors
IMI plc
IMI plc, the specialist engineering company, designs, manufactures and services highly engineered products that control the precise movement of fluids. Its innovative technologies, built around valves and actuators, enable vital processes to operate safely, cleanly, efficiently and cost effectively. The Group works with industrial customers across a range of high growth sectors, including energy, transportation and infrastructure, all of which are benefiting from the impact of long-term global trends including climate change, urbanisation, resource scarcity and an ageing population. IMI employs over 12,000 people, has manufacturing facilities in more than 20 countries and operates a global service network. The Company is listed on the London Stock Exchange. Further information is available at www.imiplc.com.
Bopp & Reuther
Bopp & Reuther is a leading manufacturer of safety, control and shut-off valve technology for the process industries as well as conventional fossil and nuclear power plants worldwide. Its head office and manufacturing plant is located in Mannheim and it has service centres in Germany, Austria, Romania and China. It employs over 400 people. Further information is available at www.bursr.com.
