Acquisitions and Disposal
03 April 2012
Halma, the leading safety, health and sensor technology group, today announces two acquisitions and a disposal. All three transactions relate to the Group's Health and Analysis Sector.
ACQUISITION OF SENSOREX
Halma acquired the trade and assets of Sensorex Inc ("Sensorex") on 2 April 2012.
Sensorex manufactures electrochemical sensors for water analysis applications. Its wide range of sensors and associated accessories are incorporated by OEMs manufacturing single and multi-parameter probes and instruments for monitoring water quality. The company's customers supply the growing environmental, drinking water, wastewater, life sciences and pharmaceutical markets. For additional information, see Note 2.
The cash consideration is $37.5 million (£23.4 million) and is adjustable Dollar for Dollar based on the level of net tangible assets at closing. Sensorex is being acquired from private shareholders. Existing management will remain in place and will continue to operate the business. The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's existing cash and debt facilities.
Sensorex will join Halma's Health and Analysis sector within the Water sub-sector which already includes the water analysis business Palintest.
Sensorex is based in Orange County, California, USA. Unaudited accounts, adjusted for non-recurring expenses, for the financial year ended December 2011 show an operating profit of $3.9 million (£2.4 million).
ACQUISITION OF ACCUTOME
Halma acquired Accutome Inc ("Accutome") on 2 April 2012. Accutome designs, manufactures and sells surgical and diagnostic instruments and a variety of pharmaceuticals for the ophthalmic marketplace.
Accutome is best known for their leading ultrasound diagnostic equipment (used prior to cataract surgery and to diagnose certain eye conditions), and for their surgical instrumentation, featuring their leading diamond bladed surgical knives. For additional information, see Note 3.
The initial cash consideration is $20 million (£12.5 million) and is adjustable Dollar for Dollar based on the level of net working capital at closing. Contingent consideration of up to $5 million (£3.1 million) is payable on earnings growth in the period to September 2013 exceeding a pre-determined target. Accutome is being acquired from private shareholders and management. Existing management will remain in place and will continue to operate the business. The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's existing cash and debt facilities.
Accutome will join Halma's Health and Analysis sector within the Health Optics sub-sector which already includes Keeler, Volk, Riester and Medicel, further expanding Halma's footprint in ophthalmic diagnostic and surgical instrumentation.
Accutome is headquartered in Malvern, Pennsylvania with a wholly owned subsidiary located in The Netherlands. Unaudited accounts, adjusted for non-recurring expenses, for the financial year ended December 2011 show revenue of $20.2m (£12.6 million) and an adjusted operating profit of $2.0 million (£1.3 million).
SALE OF CASH HANDLING BUSINESS
Halma announces that on 30 March 2012 it completed the disposal of Volumatic Limited to Project Counter Limited, a management buy-out vehicle funded by NVM Private Equity Limited. Cash consideration of £5.9 million was paid at completion of which £1.5 million was retained in escrow and will be released to Halma on attainment of an agreed performance target. Additional contingent consideration of up to £2.4 million is payable upon the attainment of pre-determined sales levels over the two years to March 2014 giving a total maximum cash consideration of £8.3 million if all performance targets are achieved. For additional information, see Note 4.
Andrew Williams, Halma's Chief Executive, commented:
"The three transactions announced today significantly strengthen our Health and Analysis sector. Accutome extends our presence in both surgical and diagnostic ophthalmic products while Sensorex strengthens our Water sub-sector's presence in the US market. Both acquisitions add new technologies which complement those of other Halma businesses. Volumatic's disposal will allow us to concentrate more resources on our core business sectors to maximise shareholder value. These transactions exemplify Halma's strategic management of the Group's portfolio which underpins its long term success."
For further information, please contact:
Halma plc
Tel: +44 (0)1494 721111
Andrew Williams, Chief Executive
Kevin Thompson, Finance Director
MHP Communications
Tel: +44 (0)20 3128 8100
Rachel Hirst / Andrew Jaques
Notes:
- Exchange rate used: $1.60/£1.
- Sensorex's products serve a number of applications including water & wastewater, environmental, biotechnology, chemical & petrochemical, food & beverage, metals & mining, oil & gas refining and pharmaceutical. The largest market segment for the company is selling analysers and sensors for drinking water & wastewater testing, which is estimated to be growing at 8% per annum. 70% of the company sales are for replacement sensors giving resilience through economic cycles.
- Cataract procedures continue to grow throughout the world and Accutome's ultrasound devices are used to both examine the eye prior to surgery and to size the eye for the correct IOL (intra-ocular lens). They are also used to assist in the diagnosis of glaucoma, a leading cause of blindness. Accutome is a world leader in the supply of diamond bladed surgical knives for ophthalmic surgery. These knives are used in a variety of procedures including cataract, glaucoma and astigmatism correction. Accutome is successful by creating customer loyalty through delivering excellent customer service which includes an industry leading repair operation.
- Volumatic was acquired by Halma in 1981. A gain will be recognised on disposal and there is no goodwill to be written off through the Group Income Statement. Volumatic was the only Group business whose products and activities were not related to any of the 12 Halma sub-sectors detailed in the Annual Report. Full details of the disposal will be given in the 2011/12 Halma Annual Report.
- Halma buys successful businesses in safety, health and environmental markets and helps them grow further through investment targeted towards increasing innovation, management development and international expansion. In the past 10 years Halma has spent over £300m acquiring more than 20 businesses with deal sizes ranging from £70m down to below £1m. Although businesses have been acquired in all areas of our activity, the majority of recent acquisitions has been in the Health & Analysis Sector.
- This statement is not intended to constitute a profit forecast for the current financial period or for any future period. In addition, this statement should not be taken to mean that the earnings per share of Halma will necessarily match or exceed the historic reported earnings per share of Halma.
- Halma's Preliminary Announcement for the year ended 31 March 2012 will be issued on 14 June 2012.
