BODYCOTE PLC - ACQUISITION
16 October 2012
BODYCOTE PLC ACQUIRES CAROLINA COMMERCIAL
HEAT TREATING BUSINESS FOR US$ 68 MILLION
MACCLESFIELD (U.K.) - Bodycote plc (LSE:BOY), the world's largest thermal processing services provider, announced today that it has acquired the business of Carolina Commercial Heat Treating (CCHT LLC) comprising six facilities in the South Eastern USA, together with an additional facility in Southern Indiana. The business was acquired from Bluewater Thermal Solutions LLC (Bluewater), for a total cash consideration of US$68 million. Bodycote has not acquired any interest in the remaining ten facilities owned by Bluewater in the Great Lakes region of the USA.
The consideration of US$68 million has been met from existing cash resources and bank facilities. In the twelve months to September 2012 the business delivered EBITDA of US$11.7 million on sales of US$34.9 million. The acquisition is expected to achieve a return on investment well in excess of Bodycote's cost of capital and be accretive to earnings in the first year of ownership.
The majority of the business serves the general industrial hinterland of the Carolinas, Georgia, Alabama and Tennessee, including some key customers in off-road vehicle and heavy truck manufacturing and a growing presence in aerospace and energy markets (c.15% of sales). Sales to the car and light truck sectors represents some 23% of the business.
Commenting on the acquisition, Stephen Harris, CEO of Bodycote said: "The acquisition of this pre-eminent heat treatment business in the South Eastern USA and Southern Indiana represents a considerable step forward in the delivery of Bodycote's strategy in North America. The business is of high quality and has few local competitors. This region of the USA continues to be amongst the highest recipients of inward investment in North America with many domestic and overseas corporations establishing facilities and supply chains in the area. The recent announcements from both Boeing and Airbus concerning their new manufacturing operations in the region underscore this trend. We expect the business to become more focused on aerospace and energy markets over time as the supply chains for these industries expand.
The acquisition also represents the first meaningful exposure for Bodycote to the off-road vehicle and heavy truck market in the USA. While demand from these particular sectors is expected to be lower in the near term, the medium and longer term prospects for this part of the business offer attractive returns".
Commenting on trading for Bodycote globally Harris added: "Trading for the period 1 July to 30 September 2012 was volatile, but overall has been in line with expectations".
Bodycote will publish its interim management statement on 16 November 2012.
Investor Conference Call
Stephen Harris and David Landless will be hosting a conference call for analysts and investors at 1000 hours today (16 October 2012).
Participants' Dial-In Number:
+44 (0) 203 140 0722
Participants will be asked for names only, no PIN required.
Webex Participant Access:
https://arkadin-event.webex.com/arkadin-event/onstage/g.php?t=a&d=705651850
Event Password 387587
About Bodycote
With more than 175 accredited facilities in 27 countries, Bodycote is the world's largest provider of thermal processing services. Through heat treatment, metal joining, surface technology and Hot Isostatic Pressing (HIP), Bodycote improves the properties of metals and alloys, extending the life of vital components for a wide range of industries, including aerospace, defence, automotive, power generation, oil & gas, construction, medical and transportation. Customers in all of these industries have entrusted their products to Bodycote's care for more than 30 years. For more information, visit www.bodycote.com.
For further information, please contact:
Bodycote plc
Stephen Harris, Chief Executive +44 (0) 1625 505300
David Landless, Group Finance Director +44 (0) 1625 505300
FTI Consulting
Richard Mountain +44 (0) 20 7269 7186
Susanne Yule +44 (0) 20 7269 7291
This information is provided by RNS
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