Technical services acquisitions in Brazil and USA
18 August 2014
Vesuvius plc ("Vesuvius" or "the Group")
Technical services acquisitions in Brazil and the USA
Vesuvius, a global leader in molten metal engineering, is pleased to announce the signing of binding agreements for the acquisition of two businesses, Ecil Met Tec and Process Metrix, in pursuit of the strategy to build a presence as a leading technical services provider to the steel and foundry industries. The total consideration for these acquisitions will be approximately £30 million, and it is expected that both will complete during 2014. Both companies are profitable, and the acquisitions are expected to be earnings enhancing in 2015. However neither acquisition is expected to make a meaningful contribution to the 2014 earnings of Vesuvius. The management of both companies will remain with Vesuvius.
François Wanecq, Chief Executive of Vesuvius, said:
"I am delighted to announce the first acquisitions we have made since our demerger in 2012. At the point of demerger we pledged to reshape the portfolio, improve margins, deliver superior returns to shareholders, and deliver growth in part by pursuing our strategy of providing technical services to the steel and foundry industries. To date, we have disposed of non-core activities in precious metals, construction and brick manufacturing, improved margins by 174 basis points, increased the dividend, and returned capital through a share buyback.
"In addition to improving our base business, we are now turning our attention to building our technical services presence, and it is particularly pleasing to have added two high technology businesses with strong management teams and well-established track records of delivering superior service to their customers. I am confident that Vesuvius' global presence and expertise will allow us to expand the accessible market for Ecil Met Tec and Process Metrix products and services.
"These acquisitions are a further demonstration of delivering on the strategy set out at the time of demergerto expand our offering to customers through the supply of data that contributes to significant improvements in the quality and productivity of their processes and products. We will continue to improve the quality of our earnings by targeting further margin improvement, reviewing the portfolio, and adding to our technical services offering in line with our stated strategy."
About Ecil Met Tec
Ecil Met Tec is a manufacturer and supplier of consumable thermocouples used to measure, amongst other things, the temperature of molten metal in the steel making process. With operations in Piedade, near Sao Paulo in Brazil, and Cleveland, USA, Ecil Met Tec has 550 staff. The total consideration is up to BRL86 million on a cash free debt free basis, with the majority payable on completion which is anticipated to occur towards the end of the year.
About Process Metrix
Process Metrix, based in Pleasanton, Northern California, is a supplier of laser units used to measure refractory wear in vessels used in the steel making process. The total consideration is US$10 million on a cash free debt free basis. Of this, US$6 million is payable on completion, which is expected by the end of September 2014, with the remainder payable over a 5 year period subject to the achievement of certain pre agreed targets.
For further information please contact:
Shareholder/analyst enquiries:
Vesuvius plc François Wanecq Chief Executive +44 (0) 207 822 0000
Chris O'Shea Chief Financial Officer +44 (0) 207 822 0000
Tony Harrison Group Head of Corporate Finance +44 (0) 207 822 0000
Media enquiries:
MHP Communications John Olsen/Vicky Watkins +44 (0) 203 128 8100
About Vesuvius plc
Vesuvius operates in the steel and foundry casting industries, with market and technology leadership across a range of mission critical products and services supplied to these sectors, including flow control solutions, advanced refractories and other consumable products.
We have a worldwide presence in both Steel and Foundry. We serve our customers through a low-cost network of manufacturing plants located close to their own facilities, and by embedding our industry experts within their operations, all supported by our global technology centres.
Vesuvius' core competitive strengths are our leading technology and innovation, strong customer relationships, well established presence in developing markets, low-cost manufacturing base, and our global reach, all of which enable us to expand our addressable markets.
Forward looking statements
This announcement contains certain forward looking statements which may include reference to one or more of the following: the Group's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters.
Statements in this announcement that are not historical facts are hereby identified as "forward looking statements". Such forward looking statements, including, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to Vesuvius, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of Vesuvius and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements. Such forward looking statements should, therefore, be considered in light of various important factors that could cause actual results to differ materially from estimates or projections contained in the forward looking statements. These include without limitation: economic and business cycles; the terms and conditions of Vesuvius' financing arrangements; foreign currency rate fluctuations; competition in Vesuvius' principal markets; acquisitions or disposals of businesses or assets; and trends in Vesuvius' principal industries.
The foregoing list of important factors is not exhaustive. When considering forward looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in documents the Company files with the UK regulator from time to time including its annual reports and accounts.
You should not place undue reliance on such forward looking statements which speak only as of the date on which they are made. Except as required by the Rules of the UK Listing Authority and the London Stock Exchange and applicable law, Vesuvius undertakes no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this announcement might not occur.
Vesuvius plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 8217766
www.vesuvius.com
This information is provided by RNS
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