Acquisition from Dover Corp.
SENIOR PLC
2 August 1999
Senior Acquires World Leading US Flexonics Business
SENIOR PLC is pleased to announce that it has acquired the entire issued share
capital of Pathway Bellows, Inc. ('Pathway') from Dover Corporation ('Dover'),
for a total cash consideration of approximately £22.3 million (US$35 million)
on a debt free basis. Pathway, based in Tennessee, is the world's largest
manufacturer of expansion joints.
In the year ended 31 December 1998, Pathway's unaudited sales and profits
before taxation and exceptional items were approximately £26.6 million
(US$41.8 million) and £2.2 million (US$3.5 million) respectively.
The consideration is being financed from the Group's existing facilities. A
further payment of not more than £0.9 million (US$1.4 million) will be made on
1 November 1999 to Dover, in return for which Senior is expected to receive
future tax benefits, the projected net present value of which substantially
exceeds the additional payment. The anticipated value of net assets at
closing is approximately £4.5 million (US$7.0 million).
Pathway is the recognised world leader in expansion joint technology.
Flexible metallic expansion joints of up to 10 metres diameter are used in
petrochemical and power generation plants in high temperature and pressure
applications. Over the next 12 months, Pathway and Senior's existing US
expansion joint operation in Texas will be merged. One-off capital and
revenue costs totalling approximately £4.8 million (US$7.6 million) are
anticipated to generate annual savings of at least £1.9 million (US$3.0
million). Senior has additional expansion joint manufacturing operations in
the UK, Denmark and Brazil and further sales operations in Asia, where Pathway
is particularly well-represented.
Commenting on the acquisition, Andrew Parrish, Senior's Group Chief Executive
said; 'The acquisition of the world's largest expansion joint manufacturer
presents an exciting opportunity for Senior to become the clear market leader
in this $300 million global market, the size of which is expected to grow
significantly over the next three years, particularly in the petrochemical
sector. Pathway is a substantial addition to Flexonics' Specialised
Industrial Division, representing a further significant step towards
reinforcing and building upon Senior's established position as world leader in
the manufacture and marketing of thin walled flexible metallic tubing and
bellows. The acquisition marks the first stage of Senior's programme rapidly
to reinvest, in our core Flexonics business, the proceeds of the recent
disposal of the bulk of our Engineered Products & Services activity.'
SENIOR PLC simultaneously announces that on 2 July 1999 it acquired the entire
issued share capital of Hydro-Flex Inc. ('Hydro-Flex'), Canada, for a cash
consideration of approximately £2.0 million (C$4.7 million), together with the
assumption of debt of approximately £0.2 million (C$0.5 million). The company
manufactures and distributes flexible metal hose, PTFE (Teflon) hose, and
manifold assemblies for the specialised industrial market, in particular for
steel plant and cryogenic applications.
In the year ended 28 February 1999, the unaudited sales of Hydro-Flex were
approximately £1.9 million (C$4.5 million). The consideration, which was
financed from the Group's existing borrowing facilities, is dependent on the
net asset value at closing, which at the time of closing was anticipated to be
approximately £0.9 million (C$2.0 million), excluding debt assumed.
Hydro-Flex, founded in 1965, is located in Ontario and has 18 employees. The
acquisition, which will be fully integrated with Senior's existing Canadian
operation (also in Toronto), will extend Senior's customer base and
distribution channels and will reinforce Senior Flexonics' leadership in this
small but valuable market.
For further information, please contact:
SENIOR PLC 01923 775547
Andrew Parrish, Group Chief Executive
Glenn Timms, Director - Corporate Development
Terry Garthwaite, Group Finance Director
Senior Flexonics Inc 001 630 3723000
William Kowal, Chief Operating Officer, Senior Flexonics
Finsbury 0171 2513801
James Murgatroyd
Morgan Bone
Internet users will be able to view this announcement, together with other
information about SENIOR PLC, on the web site www.seniorplc.com
Notes to Editors
SENIOR PLC is an international engineering group with a market capitalisation
of approximately £400 million. It is the clear global leader in the design,
manufacture and marketing of thin-walled flexible tubing and related high
technology products, servicing the Aerospace (including Space), Automotive and
Specialised Industrial markets.
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