BRAM.L Regulatory News (BRAM)

6 Jul 2007 07:00

Brammer PLC06 July 2007 Brammer plc BOADA ACQUISITION BRAMMER ACHIEVES MARKET LEADING POSITION IN CATALONIA Brammer, the European industrial services group, today announces the acquisitionof 100% of the business of Boada Industrial S.A. "Boada" in Spain. Boada is oneof the leading Catalonian specialist industrial services businesses providingcritical industrial components, bearings and related power transmissionproducts. The acquisition of Boada is consistent with Brammer's stated strategy, givingthe company the leading market position in Catalonia in the provision ofbearings, power transmission, and lubricants. The acquisition reinforcesBrammer's leadership position in Europe and enhances its key account offering topan-European customers. Highlights The acquisition of Boada will enhance Brammer's position as a major pan-Europeanindustrial services business in one of the key industrial economies of Spain. • Boada had net sales of £7.8 million in the year to 31 December 2006. • The agreement is for the acquisition of 100% of Boada payable in two tranches for a minimum consideration of £4.6 million plus an earnout estimated to be in the range of £0.8 million to £2.2 million. • The first tranche payment is £2.3 million cash, and is payable on completion. Consideration in respect of the second tranche of between £ 3.1 million and £4.5 million is to be paid in 2011. • The acquisition is expected to be earnings enhancing from completion. In addition Brammer also announces the completion of two further acquisitions inEurope. On 13 June 2007 Brammer completed the acquisition of 52% of the entireissued share capital of ZPV group s.r.o "ZPV" an established Czech basedbearings and mechanical power transmission business. On 19 June 2007 Brammeralso completed the acquisition of the entire share capital of Mercia EngineeringSupplies Limited "Mercia" an established UK based bearings and mechanical powertransmission business. In aggregate, these two businesses generated £6.9 million of sales in the yearto 31 December 2006 and have been acquired for an aggregate consideration in therange of £2.4 million to £3.5 million should certain profit targets be achieved. Both these acquisitionsare expected to be earnings enhancing from completion. David Dunn, chairman of Brammer, commented: "We are delighted to announce the acquisition of Boada which further extendsBrammer's European market leadership. It strengthens our position in Spain andgives us a base from which to grow earnings through greater market penetrationin Spain, a key industrial economy. Together with the acquisitions of Merciaand ZPV, the acquisition of Boada demonstrates good progress in executing ourpan European acquisition strategy, as highlighted at the time of our equityfundraising in April. These transactions fit our stated strategy of acquiringquality businesses which closely fit Brammer's established product portfolio andbusiness strategy in order to complement the organic growth opportunities in ourkey account and pan-European businesses. " Enquiries: Brammer plc 0161 902 5572 David Dunn, Chairman Ian Fraser, Chief Executive Paul Thwaite, Finance Director Issued: Citigate Dewe Rogerson Ltd 020 7638 9571 Martin Jackson Nicola Smith Brammer plc Background to the acquisition of Boada. Introduction Brammer, the European industrial services group, today announces the acquisitionof 100% of the business of Boada. Boada is engaged in the provision ofcritical industrial components including bearings, power transmission andlubricants to a wide variety of industrial and commercial customers. Terms of the acquisition Brammer will acquire a 100% interest in Boada payable in two tranches. For thefirst tranche Brammer will pay £2.3 million in cash. The second tranche payment,in 2011, will be for a minimum consideration of £2.3 million plus an earnoutestimated to be in the range of £0.8m to £2.2 million should certain agreedprofit targets be achieved. Background on Boada The Boada business has 4 branches across Catalonia and 53 employees. The product range includes bearings, power transmission, and lubricants and is agood fit with Brammer's existing product portfolio. The business generated sales of £7.8 million and EBITDA of £0.7 million in theyear to 31 December 2006. Net assets were £2.6 million at the year end, grossassets were £4.9 million. Reasons for the acquisition The acquisition of the Boada business is in line with Brammer's strategy offurther developing its position as the leading pan-European industrial servicesbusiness through both organic growth and bolt-on acquisitions. The acquisition of the Boada business: • gives Brammer a leading position in the provision of bearings and mechanical power transmission in the strategically important and growing Spanish industrials market; and • enhances Brammer's key account and pan-European capabilities. ZPV and Mercia In addition Brammer also announces today that it completed on 13 June 2007 theacquisition of 52% of the entire issued share capital of ZPV group s.r.o "ZPV"an established Czech based bearings and mechanical power transmission businessfor an initial payment of £0.9 million. The remaining 48% will be acquired byBrammer in 2010 under an earn-out mechanism, the maximum total considerationwill be £2.7 million cash Brammer completed on 19 June 2007 the acquisition of the entire share capital ofMercia Engineering Supplies Limited "Mercia" an established UK based bearingsand mechanical power transmission business for a maximum consideration of £ 0.8million payable in cash. In aggregate, these two businesses generated £6.9 million of sales in the yearto 31 December 2006. In line with strategy, further acquisitions are being sought to consolidateBrammer's position as the only supplier capable of servicing the needs of majorpan-European customers for critical industrial components, bearings and relatedproducts. ENDS This information is provided by RNS The company news service from the London Stock Exchange