Essentra plc Components Acquisition in China (5134Y)
May 13 2021 - 1:00AM
UK Regulatory
TIDMESNT
RNS Number : 5134Y
Essentra plc
13 May 2021
ESSENTRA PLC
A leading global provider of essential components and
solutions
COMPONENTS ACQUISTION IN CHINA
Essentra PLC announces that its subsidiary, Essentra Overseas
Limited ("Essentra"), has signed an agreement to purchase the
business of Jiangxi Hengzhu Electrical Cabinet Lock Co., Ltd
("Hengzhu") via a newco. Closing of this transaction is subject to
customary conditions, including regulatory approval and
incorporation of the newco, and is anticipated in Q3 2021. Essentra
will initially hold a 73% stake in the newco, with the remainder
held by the current principal owner of Hengzhu. The remaining 27%
stake is subject to put and call options whereby Essentra may
acquire the minority shareholding for a consideration determined by
future operating performance and capped to a maximum upper limit of
Yen 37.5m (or c.GBP4m).
The initial consideration to be paid by Essentra for this
transaction is Yen 100m (or c.GBP11m), which will be fully funded
from existing facilities.
Hengzhu is an access hardware manufacturer and distributor in
China. The business operates from a single facility in Yichun,
Jiangxi and has a workforce of c.490 employees. The majority of
Hengzhu's sales (c70%) are domestic and the business serves over
7,000 customers which are typically mid-sized industrial
manufacturers
focused on market categories such as data centre storage equipment and power distribution.
Commenting on today's announcement, Paul Forman, Chief Executive
said:
"This transaction strengthens our position in China, enabling us
to expand our access hardware range. Hengzhu has excellent growth
prospects and is a strong fit for the Components division. We have
proven strong cross selling opportunities for this product range in
Europe and Hengzhu provides us with the ideal platform to further
penetrate Asia. There is also scope to leverage our operations
expertise to increase the efficiency of the business. This
transaction is earnings accretive and will deliver sustainable
value to Essentra over the long-term.
I would like to welcome all at Hengzhu to the Essentra family
and wish them every success."
Enquiries
Essentra plc Tulchan Communications LLP
Aamir Mohiuddin, Investor Relations Martin Robinson
Director Olivia Peters
Lucy Yank, Group Communications Tel: +44 (0)20 7353 4200
Director
Tel: +44 (0)1908 359100
Notes to Editors
About Essentra plc
Essentra plc is a FTSE 250 company and a leading global provider
of essential components and solutions. Organised into three global
divisions, Essentra focuses on the light manufacture and
distribution of high volume, enabling components which serve
customers in a wide variety of end-markets and geographies.
Headquartered in the United Kingdom, Essentra's global network
extends to 34 countries and includes 7,065 employees, 50 principal
manufacturing facilities, 32 sales & distribution operations
and 3 research & development centres. For further information,
please visit www.essentraplc.com .
Essentra Components
Essentra Components is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded and
metal items. Operating in 25 countries worldwide, 15 manufacturing
facilities and 25 sales & distribution centres serve more than
82,000 customers with a rapid supply of low cost but essential
products for a variety of applications in industries such as
equipment manufacturing, automotive, fabrication, electronics and
construction. The division also includes the Reid Supply business,
which provides a wide range of branded hardware supplies to a broad
base of industrial customers, largely located in the US
Mid-West.
Essentra Packaging
Essentra Packaging is one of only two multicontinental suppliers
of a full secondary packaging range to the health and personal care
sectors, with 25 facilities across three geographic regions. The
division's innovative products include cartons, leaflets,
self-adhesive labels and printed foils used in blister packs, which
help customers to meet the rapidly-changing requirements of these
end-markets and can also be combined with Essentra's authentication
solutions to help the fight against counterfeiting.
Essentra Filters
Essentra Filters is the only global independent cigarette filter
supplier. The twelve sites across nine countries, including three
R&D centres, provide a flexible infrastructure strategically
positioned to serve the tobacco sector. The business supplies a
wide range of value-adding high quality innovative filters,
packaging solutions to the roll your own segment and analytical
laboratory services for ingredient measurement to the industry:
Essentra's offering also includes Heat Not Burn and e-cigarette
solutions to the rapidly evolving market for Next Generation
Products. The division also includes the Tear Tapes business, which
is globally recognised as the leading manufacturer and supplier of
pressure-sensitive tear tapes, that are largely used in the
tobacco, food and drink and specialist packaging.
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END
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