IMI Announces £113m Acquisition in Fluid Controls
06 March 2006
IMI plc, the major international engineering group, has agreed to acquire the Truflo Group, a leading specialist in valves and related flow control products, for an enterprise value of 113m pounds.
The Truflo Group serves a number of niche market sectors including oil and gas, nuclear, petrochemical and marine applications. Truflo has manufacturing plants and other facilities in the UK, Italy, France, Belgium, Germany and Canada. Approximately 500 employees, including operational management, will be transferring with the business.
The majority of Truflo will become part of IMI's Severe Service business, which is a leading global provider of engineered valve solutions for critical processing plant. The balance, which includes specialist pressure regulator and control systems (approximately 15% by turnover), will become part of IMI's Fluid Power business, which has complementary operations.
In 2005 Truflo Group had sales of 66m pounds and underlying operating profit of 12.8m pounds. The value of operating assets to be acquired is approximately 16m pounds.
IMI has agreed to acquire Truflo from the Alchemy Investment Plan and others for a cash consideration of 120m pounds payable on completion, with Truflo having net cash of approximately 7m pounds at 31 January 2006, representing an enterprise value of 113m pounds. The consideration will be funded out of IMI's existing resources and banking facilities. Completion is subject to regulatory clearances which are expected to be received within two months.
Martin Lamb, IMI's Chief Executive, commented:
"We have followed the fortunes of Truflo for some considerable time and are delighted to have made this acquisition. Truflo's activities in oil & gas and power sectors are complementary to our own, and their involvement in the petrochemical and marine sectors opens up a number of new opportunities for the combined business. They have an extensive installed base, a number of market-leading brands, good technology, and some great customer relationships. The sharing of market intelligence, manufacturing capacity and a combined aftermarket service infrastructure should deliver numerous opportunities for growth."
