(Alliance News) - Bodycote PLC on Monday said it has bought two specialist technology focussed businesses for USD145 million.
Bodycote is a Cheshire-based supplier of heat treatments and specialist thermal processing services.
It said it has bought Lake City hot isostatic pressing based in Warsaw, Indiana, a "leading" medical market HIP and vacuum heat treatment business, primarily supplying the orthopaedic implant market as well as civil aerospace customers.
It has also bought Stack Metallurgical Group based in the Pacific Northwest of the US, a "key" provider of HIP, heat treatment and metal finishing services primarily for the civil aerospace, defence and energy markets.
"The businesses are highly complementary to Bodycote's existing operations and will both expand our geographic footprint in North America and provide additional customer reach," Bodycote said.
Bodycote added the businesses delivered strong growth in the first half of 2023, with revenue rising by 29%. A broadly similar rate of growth is expected for the second half, with full-year revenue forecasted to be around USD45 million.
The two companies have been bought for USD145 million on a cash and debt dress basis.
Bodycote said they will be accretive to company margins and earnings per share from the first year post completion and are expected to exceed Bodycote's cost of capital in 2025.
In addition, Bodycote on Monday announced plans to open a new HIP plant utilising one of the company's existing sites in greater Los Angeles. This capacity will become operational during 2024 and will support the rapid growth in space and civil aviation markets in the Los Angeles area.
Stephen Harris said: "These investments are an important and exciting enabler of our strategy to further enhance and grow our specialist technologies businesses. In addition, they will also expand our footprint in aerospace and medical heat treatment on the West Coast and in Indiana in the US. The acquisitions will enhance group margins, are accretive to earnings per share and allow us to further capitalise on the structural growth opportunities in the space, civil aerospace and medical markets."
Shares in Bodycote were down 1.0% to 604.51 pence each in London on Monday morning.
By Sophie Rose, Alliance News reporter
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