Bodycote merges PVD business with IonBond
Bodycote International plc announces the merger of its PVD coatings division
with those of SSCP Coatings Limited (SSCP), the private equity owners of the
IonBond group of Olten, Switzerland.
Bodycote has transferred, with effect from 1 November 2004, the business and
assets of its PVD division to SSCP for a consideration of £26.1m of which £5.2m
has been reinvested in SSCP. The proceeds will, in the first instance, be used
to reduce Group net debt. Bodycote will have board representation in SSCP and
an initial shareholding of 15% which may be increased in the future if certain
criteria have been satisfied. In the year ended 31 December 2003 the PVD
division contributed £1.6m to Bodycote's operating profit. As at 30 June 2004
the book value of the assets being transferred was £28.3m. Along with
associated transaction costs this is expected to result in an exceptional
charge of approximately £3m.
The combined SSCP group will trade under the IonBond name (the capital `B' in
IonBond will be the red centered Bodycote `B' trademark) and will have pro
forma sales of £53.2m, operate from 25 locations in 12 countries with more than
600 employees.
A long-term cross selling agreement has been put in place under which Bodycote
will continue to offer IonBond's PVD services to its extensive multinational
client base and IonBond will market Bodycote's heat treatment, materials
testing and hot isostatic pressing services.
John Hubbard, Chief Executive of Bodycote, said:
`The merger of the Physical Vapour Deposition (PVD) group of Bodycote with the
IonBond PVD group establishes the technical skills and geographic scope to
provide global blue-chip manufacturers with critical solutions. PVD is used in
manufacturing to improve mechanical, tribological and decorative properties of
components beyond those available by traditional methods and in an
environmentally safe manner. Market and customer synergies between PVD and Heat
Treating will be enhanced through the additional coverage offered by this
focused joint venture.
`The merger will accelerate achievement of our strategy to expand our PVD
interests technically and geographically. We expect strong sales growth in the
venture as it gains market share, starts up additional locations and as new
work comes on stream from outsourcing projects.'
Marco Marchetti, Chief Executive of IonBond, said:
`The merger is part of a strategy to rationalise the highly fragmented PVD
market by providing economies of scale in marketing, administration and
research and development into new product offerings. The combined group has a
strong position in the coating of decorative products, automotive components,
medical devices and stamping and forming dies and moulds. More acquisitions are
planned in the near future to expand the cutting tools services and to extend
the geographical base.'
For further information please contact:
Bodycote International plc
John D Hubbard, Chief Executive Tel: +44 1625 505300
IonBond
Marco Marchetti, Chief Executive Tel: +41 622 878787
Financial Dynamics Tel: +44 020 7831 3113
Jon Simmons
Sally Lewis
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