Essentra buys components manufacturer Wixroyd for GBP30 million

(Alliance News) - Essentra PLC on Thursday announced the acquisition of Wixroyd Holdings Ltd, its first buy since unveiling a new strategy to become a pure-play components business.

The Milton Keynes, England-based components producer said that it has acquired Wixroyd for an initial consideration of GBP29.5 million, as the company looks to "accelerate and supplement organic growth through value enhancing bolt-on acquisitions".

The acquisition includes up to GBP7.0 million deferred earn-out consideration on a cash-free debt-free basis.

Essentra expects revenue and purchasing synergies to "materially benefit" as a result of the acquisition.

Wixroyd, a Chichester, England-based mechanical components manufacturer and distributor, has a portfolio of over 100,000 products and 9,000 customers.

Essentra announced its intention to become a solely components-based business in 2021, selling its packaging business and filters business in 2022.

The acquisition of the Wixroyd is intended to extend Essentra's capabilities in hardware components, as well as create cross-selling opportunities, focusing on Essentra's customer base in Continental Europe, the company said.

Essentra Chief Executive Designate Scott Fawcett said: "Our plan is to launch Wixroyd products to Essentra's Continental European customers, further strengthening the breadth of our offer."

In September, Essentra built a distribution hub in Poland, which it said would service 20,000 product lines in Europe.

"This transaction is a great example of the components' strategy in action as we leverage our strong balance sheet and the significant opportunities for product expansion in highly fragmented markets to accelerate our potential as a pure-play components business," Fawcett said.

In 2021, Wixroyd achieved revenue of GBP10.4 million and adjusted earnings before interest, tax, depreciation and amortisation of GBP2.6 million.

Essentra shares were up 1.2% trading at 247.00 pence on Thursday morning in London.

By Harvey Dorset; harveydorset@alliancenews.com

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