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Diploma PLC (DPLM)

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Thursday 11 July, 2019

Diploma PLC


RNS Number : 1383F
Diploma PLC
11 July 2019



                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: +44 (0)20 7549 5700

FACSIMILE: +44 (0)20 7549 5715




11 July 2019








Diploma PLC, the international group supplying specialised technical products, technical services and value-add services, is pleased to announce the acquisition of the assets and trade of Virginia Sealing Products, Inc. ("VSP"). 


VSP is a leading supplier of high-quality gaskets and fluid sealing products, as well as customised solutions, to the industrial MRO market.  The business specialises in customers processing and transporting hazardous and corrosive materials, along with those in other industrial markets, including power generation, pulp and paper and marine.  VSP is built on strong, long-standing customer and supplier relationships supported by value-add servicing.  The business is based in Virginia, with operations throughout the southern United States. 


Prior to acquisition, VSP was owned by Paul and David Malgee, together with minority shareholdings held by key members of the Executive management team. Following the acquisition, the Executive management team will remain with the business in their current roles.


In the year ended 31 December 2018, VSP reported audited revenues of £35.7m (US$44.6m) and profit before tax of £5.8m (US$7.3m). Gross assets at 31 December 2018 were £10.2m (US$12.8m). After adjusting for finance costs and certain non-recurring expenditure, adjusted operating profit for the year ended 31 December 2018 was £6.4m (US$8.0m).  The initial cash consideration, before acquisition costs, is £56.0m (US$70.0m), subject to minor working capital adjustments and represents a multiple of ca. 9x adjusted historic operating profit. Further deferred consideration of up to a maximum of £8.0m (US$10.0m) and consistent with the initial transaction multiple, may be payable in late 2020 subject to achievement of operating profit targets. 


The acquisition will be funded through existing cash resources and new debt facilities. Diploma PLC will continue to maintain a strong balance sheet with Net Debt:EBITDA unlikely to exceed 0.5x, following this transaction.


We expect this acquisition to be immediately earnings enhancing for the Group and will be reported as part of the Seals Sector activities.


Johnny Thomson, Chief Executive Officer of Diploma PLC said:


"We are delighted to welcome VSP into the Diploma Group. The business has an excellent management team, a strong service culture, and an impressive customer and supplier base.  The acquisition is consistent with our strategy and provides an exciting opportunity to extend our Seals activities in North America."






Tulchan Communications -

+44 (0)20 7353 4200

Martin Robinson


David Allchurch




Diploma PLC -

+44 (0)20 7549 5700

Johnny Thomson, Group Chief Executive Officer


Nigel Lingwood, Group Finance Director











Diploma PLC is an international group supplying specialised technical products, technical services and

value-add services to the Life Sciences, Seals and Controls industries.


Diploma's businesses are focussed on supplying essential products and services which are funded by

the customers' operating rather than their capital budgets, providing recurring income and stable revenue growth.


Our businesses then design their individual business models to closely meet the requirements of their customers, offering a blend of high-quality customer service, deep technical support and value adding activities.  By supplying essential solutions, not just products, we build strong long term relationships with our customers and suppliers, which support attractive and sustainable margins.


Finally we encourage an entrepreneurial culture in our businesses through our decentralised management structure.  We want our managers to feel that they have the freedom to run their own businesses, while being able to draw on the support and resources of a larger group.  These essential values ensure that decisions are made close to the customer and that the businesses are agile and responsive to changes in the market and the competitive environment.


The Group employs ca. 1,800 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.


Over the last ten years, the Group has grown adjusted earnings per share at an average of ca. 13% p.a. through a combination of organic growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £1.6bn.


Further information on Diploma PLC can be found at



LEI: 2138008OG17VYG8FGR19







Further information on Diploma PLC, together with a copy of this Announcement, is available at

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