Avon Rubber shares surge on new acquisition

(ShareCast News) - Avon Rubber bought an Italian dairy equipment producer in a €29.75m deal, sending shares upward.At 0929 BST shares in the stock were up by 4.22% to 838.50p.Avon Rubber said it bought InterPuls through its subsidiary Avon Rubber Italia for €29.75m.Under the deal Avon would take on InterPuls' net debt of €4m, and pay €25.75m in cash. The money came out of the company's existing resources.Avon said the acquisition of the company, which has a developed a unique range of milking equipment, was expected to be significantly earnings enhancing in the 2016 financial year.InterPuls had revenues of €15.1m and earnings of €3.1m for the financial year to 31 December 2014.Avon said InterPuls general manager and director Gabriele Nicolini signed an agreement to commit to the business for three years.WH Ireland held a 'buy' rating on the stock and raised its target price from 900p to 950p.Analysts at WH Ireland raised their earnings per share expectation for 2016 by 8%, and said InterPuls was "highly complementary" to Avon's existing dairy business.