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(Alliance News) - Diploma PLC on Tuesday announced a share placing to fund the proposed acquisition of Windy City Wire Cable & Technology Products LLC.
The technical products supplier agreed a deal to buy US low voltage wire and cable supplier Windy City Wire for GBP357 million. Diploma said WCW is a highly attractive business in a "core Diploma market" and expands its presence in the US.
Diploma said the price at which the placing shares are to be placed will be determined at the close of the bookbuilding process. The stock closed down 0.6% at 1,711.00 pence on Tuesday.
The London-headquartered company said completion of the acquisition is expected to occur by mid-November 2020, subject to receipt of the equity placing proceeds.
Elsewhere, Diploma, which had suspended its interim dividend in May, recommended a payment of 30.0p per share for the year ended September 30.
"In year one, the transaction is expected to be both significantly earnings enhancing and cover our cost of capital, while allowing us to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions as opportunities arise. Recent months have confirmed the resilience of the Diploma model and validated our strategic focus on building value-add, scalable, well-diversified businesses in core markets. I am confident in the future of our group," said Chief Executive Johnny Thomson.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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