Bodycote Regulatory News (BOY)

06 April 2020

Bodycote plc

Bodycote completes acquisition of Ellison Surface Technologies

Bodycote, the world's largest provider of heat treatments and specialist thermal processing services, is pleased to announce completion of the acquisition of Ellison Surface Technologies. The acquisition creates one of the largest providers of thermal spray and engineered coating surface technology services in the world.

In December, we announced that the gross consideration for the acquisition would be $200 million (£162 million). $120 million (£97 million) was paid on 3 April 2020, the date of completion, with the remaining $80m (£65 million) due for payment on 3 April 2021.

Ellison's business generated revenues of $59 million (£48 million) for 2019, with associated pro-forma EBITDA of $12 million (£10 million). This represented revenue growth on 2018 of 17%, while pro-forma EBITDA increased 48%, reflecting the fact that Ellison has been successfully gaining share. This also positions the business for further revenue and profit growth in future years. Bodycote will receive tax benefits worth at least $30 million (£24 million) in the years to come. Ellison employs almost 400 people across six sites located across the United States, Canada and Mexico.

Bodycote continues to execute its strategy to invest in Specialist Technologies and secular growth businesses. Ellison's business is an excellent strategic fit with Bodycote's existing Surface Technology business, which itself has seen strong structural growth in recent years. Together, the enlarged business can offer additional technologies and added resources to consolidate its leadership in surface coating solutions and specialist processes, including thermal spray coating, liquid coating, thermal processing, and diffusion coating. Ellison's operations will be fully integrated into Bodycote's business model both from an operational and commercial perspective, and will operate going forward under the Bodycote brand.

Stephen Harris, Group Chief Executive of Bodycote plc, commented: "This acquisition continues our strategy to build our Specialist Technolgies portfolio and enhance our exposure to the civil aerospace market, where we see structural growth over the long term, nothwithstanding the current hiatus in the industry. Ellison's business is one that we have respected for a long time and is a perfect strategic fit for Bodycote's Specialist Technologies businesses."

Completion of the transaction was filed on 3 April 2020.

For further information, please contact:

Bodycote plc

Stephen Harris, Group Chief ExecutiveDominique Yates, Chief Financial Officer

Michaela Yasin, Chief Marketing Officer

Tel No +44(0) 1625 505300

FTI Consulting

Richard Mountain

Susanne Yule

Tel No +44 (0) 2037271340

END