Bodycote PLC Acquisition of Ellison Surface Technologies (9503X)
December 24 2019 - 1:00AM
UK Regulatory
TIDMBOY
RNS Number : 9503X
Bodycote PLC
24 December 2019
24 December 2019
Bodycote plc
Acquisition of Ellison Surface Technologies
Bodycote, the world's leading provider of heat treatment and
specialist thermal processing services, has entered into an
agreement to acquire Ellison Surface Technologies ('Ellison'),
creating one of the world's largest providers of thermal spray and
engineered coating surface technology services to the aerospace
industry.
Ellison's business, based in North America, is highly
complementary to Bodycote's existing Surface Technology business.
It is primarily focused on the aerospace market. It will be
integrated into Bodycote's surface technology and aerospace
business, which itself has seen strong structural growth in recent
years.
Gross consideration for the acquisition will be $200 million
(GBP154 million). When adjusted for tax benefits worth at least
GBP30m, net consideration for the transaction is approximately
GBP170 million. The consideration will be settled using Bodycote's
existing committed credit facilities.
Ellison's business generated revenues of $50m (GBP38m) in 2018,
with associated pro-forma EBITDA of $8m (GBP6m). Based on results
year to date, it is anticipated that Ellison's revenue for 2019
will be $58m (GBP44m) with pro-forma EBITDA of $12m (GBP9m). This
expected revenue growth of 16%, and its associated 50% increase in
pro-forma EBITDA, reflects the fact that Ellison has been
successfully gaining share in the civil aviation business, which
will also provide a solid foundation for further revenue and profit
growth in future years. It is anticipated that the Ellison business
will be immediately earnings enhancing to the enlarged Bodycote
business. Ellison employs almost 400 people across six sites
located across the United States, Canada and Mexico.
Commenting on the transaction, Stephen Harris, Group Chief
Executive of Bodycote plc, said 'Ellison's business is one that we
have long respected and is a perfect strategic fit for Bodycote's
aerospace and Specialist Technologies' businesses. Ellison has been
successful in winning new business in recent years and it will be
very complementary to Bodycote's existing Surface Technology
business.'
Completion of the transaction is contingent on various
regulatory filings' processes; it is anticipated that the
transaction will complete during the first quarter of 2020.
Bodycote was advised by Credit Suisse on this transaction, while
the sellers were advised by Lazard.
Acquisition Update Conference Call
Stephen Harris and Dominique Yates will be hosting a conference
call for analysts and investors to discuss the acquisition in
detail at 8.00am on January 7(th) .
Participant's dial in number : +443333009261 (Direct)
Participants will be asked for names only, no PIN required
For further information, please contact:
Bodycote plc
Stephen Harris, Group Chief Executive
Dominique Yates, Chief Financial Officer
Tel No +44(0) 1625 505300
FTI Consulting
Richard Mountain
Susanne Yule
Tel No +44 (0) 2037271340
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END
ACQQZLBLKLFBFBE
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