Wednesday, August 17, 2011

Acquisition of one of best known automation companies

Spectris plc has signed an agreement to acquire the Omega Engineering business. The purchase consideration of US$475 million (approximately €330 million), on a debt and cash-free basis, will be met from cash and new bank facilities and is subject to routine balance sheet adjustments.

Omega is a privately-held business which provides a broad range of process measurement and control instrumentation to customers in industrial and academic markets, selling directly to end users in these sectors via catalogue, telephone and internet. The company has a differentiated customer service model with emphasis on providing high levels of quality, availability, customisation and speed of delivery to a large base of customers who want a convenient and reliable source for their small-scale process and automation needs and R&D requirements. It is a leading integrated, international, single-source supplier of highly engineered products and customised solutions in the process measurement and control industry, with a very strong brand, high levels of repeat business, a defensible and resilient business model and an unmatched reputation for meeting customer needs. In marketing circles Omega is known for having perfected the art of the engineering reference catalogue back in the 80s.

Headquartered in Stamford, Connecticut, USA, the company has five manufacturing facilities and two distribution/sales facilities and employs around 700 people. Founded in 1962, Omega has grown steadily and now offers a diverse range of process measurement and control products to measure temperature, pressure, flow, level, strain, humidity, pH and conductivity. The company had sales of $168 million (approximately £103 million) in 2010 and adjusted operating profit before interest and tax of $39.6 million (approximately £24 million) and was cash generative. The value of gross assets acquired as at 31 December 2010 was $84.4 million (approximately £52 million). The acquisition is expected to enhance adjusted earnings per share in the first full financial year of ownership. They expect the acquisition to complete in Q4 on satisfaction of customary closing conditions including US and German antitrust clearances.

John O’Higgins, Chief Executive of Spectris, commented: “Trading since the time of our last update on 15 July has remained in line with our expectations. We are delighted to have reached agreement to acquire the Omega Engineering business, which will bring a significant strategic growth platform to our Industrial Controls segment."

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