(Alliance News) - Shares in Avon Rubber PLC jumped Wednesday after it acquired the ballistics protection unit of New York-listed 3M Co for up to USD116 million.
Shares in Avon Rubber - which makes gas masks and cow milking equipment - were 9.0% higher in London on Wednesday at 1,443.70 pence each.
Avon will pay an initial USD91 million in cash for the business - including the Ceradyne ceramic brand - with a further USD25 million payment depending on the outcome of pending tenders.
In 2018, the acquired business generated USD10.8 million in earnings before interest, taxes, depreciation and amortisation on revenue of USD85.4 million. For the year ended September 2018, Avon Rubber generated GBP35.3 million in Ebitda on revenue of GBP165.5 million.
"The acquisition of 3M's ballistic-protection business is an important strategic step for Avon Protection," Avon Chief Executive Officer Paul McDonald said.
"The business is a high-quality business, backed by proprietary technology, established contract platforms and well invested manufacturing operations," McDonald added. "The combination of the business and Avon Protection will significantly strengthen our technology and our personal protection product offering to an enlarged customer base, thereby accelerating the long-term growth prospects for the group."
The acquired business operates primarily from three sites in the US and produces different types of armour including ballistic helmets and body armour. Customers include the US and other global military and law enforcement organisations.
"We are delighted to have identified an opportunity that fits our clear commercial and financial criteria, with a strong cultural fit," McDonald continued. "In the short term we will be focused on ensuring a successful and efficient integration of the two businesses and we look forward to continuing to make further strategic progress over the remainder of the year and beyond."
Avon Protection (AVON)