Acquisition and Disposal

RNS Number : 5534I

Halma PLC

02 June 2014

 



Halma plc ('Halma') ACQUISITION AND DISPOSAL Halma, the leading safety, health and environmental technology group, today announces an acquisition and a disposal. ACQUISITION OF ROHRBACK COSASCO SYSTEMS INC. and associated companies ('RCS') On 30 May 2014, Halma completed the acquisition of RCS.  RCS (www.cosasco.com) is a world leader in the design, manufacture and sales of pipeline corrosion monitoring products and systems into diverse industries including Oil, Gas, Petrochemical, Pharmaceutical, Chemical and Utilities. RCS is located in Santa Fe Springs, California, USA and has offices in Canada, UK, UAE, Singapore, China, Australia and Houston, Texas, USA. Halma paid a cash consideration to RCS's private shareholders of $108 million (£64.7 million) for the share capital plus $8.0 million (£4.8 million) for cash retained in the business.  The consideration is adjustable $ for $ if the completion accounts show a Net Tangible Asset Value (NTAV) for RCS above or below $13.9 million (£8.3 million). The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's existing cash and debt facilities. Unaudited accounts for RCS for the financial year ended December 2013 showed revenue of $44.4 million (£26.6 million) and profit before interest and tax, adjusted for non-recurring expenses, of $11.0 million (£6.6 million). The existing RCS management team will remain in place and will continue to operate the business. RCS will join the Halma Process Safety sector, collaborating with businesses which already operate in the same industries with similar long-term market growth drivers, including increasing safety requirements. Andrew Williams, Halma's Chief Executive, commented: "The acquisition of RCS expands our portfolio of critical safety products which are sold into the Energy and Utility markets to protect life and operational assets. Our Process Safety sector has delivered strong organic growth over the past decade and RCS's international presence combined with potential technology collaboration with other Halma companies offers exciting new opportunities to sustain that success in the future."

SALE OF MONITOR ELEVATOR PRODUCTS, INC. ('Monitor') On 30 May 2014, Halma completed the sale of Monitor Elevator Products, Inc. to Innovation Industries Inc. Cash consideration of $6.0 million (£3.6 million) was paid at completion, of which $0.9 million (£0.5 million) was retained in escrow for release in two years.  Consideration is adjustable $ for $ to the extent net assets are more or less than $2.5 million (£1.5 million). For additional information, see Note 3. Andrew Williams, Halma's Chief Executive, commented: "Monitor has delivered good value for shareholders over almost 20 years under Halma's ownership with a strong focus on manufacturing customised control panels for elevator modernisation in the north-eastern USA.  "This no longer fits well with our global market-leading door safety sensor and display product business, which remains an important contributor to Halma's Infrastructure Safety sector.  We wish Monitor further success under Innovation's ownership."

For further information please contact: Halma plc Andrew Williams, Chief Executive Kevin Thompson, Finance Director	[phone]
MHP Communications Rachel Hirst / Andrew Jaques	[phone]

Notes

1.	Exchange rate used:  US$ 1.67 / £1.
2.	RCS is a world leader in corrosion monitoring technology supplying advanced corrosion management solutions to diverse industries including oil, gas, petrochemical, chemical, pharmaceutical, pulp & paper, water treatment and utilities.  RCS provides a wide range of corrosion monitoring products to meet diverse industry needs ranging from mechanical access systems to advanced instrumentation systems adapted to the most severe operating environments.  Their products, as is the case with the products from our bursting discs and valve interlock business, protect very valuable assets as well as personnel safety and the environment, particularly in pipelines.  They have an active NPD programme both to enhance their technology and to pursue market diversification.
3.	Monitor was acquired by Halma in 1995. A gain will be recognised on disposal and there is no goodwill to be written off through the Group Income Statement.  In the financial year ended 29 March 2014, Monitor had revenue of $12.2 million (£7.3 million).  Full details of the disposal will be given in the 2014/15 Halma Annual Report.
4.	Halma buys successful businesses in safety, health and environmental markets helping them grow further through investment targeted towards increasing innovation, management development and international expansion. In the past 10 years Halma has spent over £450m acquiring more than 30 businesses with deal sizes ranging from £70m down to below £1m.
5.	This statement is not intended to constitute a profit forecast for the current financial period or for any future period.  In addition, this statement should not be taken to mean that the earnings per share of Halma will necessarily match or exceed the historic reported earnings per share of Halma.
6.	A copy of this announcement, together with other information about Halma, may be viewed on its website:  www.halma.com.
7.	Halma's Preliminary Statement of the Final Results for the year ended 29 March 2014 will be issued on 12 June 2014.

 

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