Diploma Regulatory News (DPLM)

22 Aug 2007 12:00

Diploma PLC22 August 2007 12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX TELEPHONE: +44 (0)20 7549 5700 FACSIMILE: +44 (0)20 7549 5715 FOR IMMEDIATE RELEASE 22 August 2007 DIPLOMA ACQUIRES 90% of M SEALS A/S FOR A MAXIMUM OF £6.2m (DKK67.5m) Diploma PLC, the international specialised distribution group, is pleased to announce the acquisition of M Seals A/S ("M Seals"), a leading distributor of industrial seals in Denmark. M Seals is based in Espergaerde, 45 minutes north of Copenhagen, where it operates from a 22,000 square foot leasehold facility and employs 25 staff. The company also has a sales office in Halmstad, Sweden, which is 11/2 hours from Espergaerde. M Seals is a specialised distributor of O-rings, moulded parts, PTFE products and shaft seals. Products range from the finest precision seals for hearing aids to large heavy duty seals for wind power mills. It has approvals from the various industries which it serves, including the Beverage, Air conditioning, Wind Turbine and Pharmaceutical industries. M Seals also offers value added activities comprising kitting and assembly of spring loaded PTFE seals. M Seals has a solid level of existing business built on multi-year supply agreements with key customers. Of its total sales, 80% are to Industrial OEMs with the balance 20% to hydraulic repairers. Some 80% of sales are in Denmark, with 20% exported to Sweden, China and other overseas markets. Prior to acquisition, M Seals was owned by its management, comprising Martin and Eva Laegdsgaard and Thomas Petersen, through their respective holding companies Dagelokke Holding ApS and TBP Holding ApS. Thomas Petersen will remain with the Company as Managing Director of M Seals and will retain a minority interest of 10% in M Seals. Put and Call options exist over the minority shares which can be exercised after five years, based on an agreed multiple of earnings and subject to a maximum cap. Profit before tax for M Seals in the year ended 30 June 2007 was DKK9.7m (£0.9m) on sales of DKK53.4m (£4.9m). Consolidated gross assets at 30 June 2007 were DKK24.8m (£2.3m). At completion, net assets are expected to be approximately DKK9.0m (£0.8m) including debt of DKK5.0m (£0.5m). The cash consideration to be paid for 90% of the business, which will be met from the Group's existing cash resources, is DKK67.5m (£6.2m), before acquisition costs. Bruce Thompson, Chief Executive of Diploma PLC said: "M Seals is a good example of a well run and profitable, specialised seal distributor with value added activities. The acquisition of M Seals will provide a good platform from which to expand the Group's North American centred Seals business into Continental Europe." For further enquiries please contact: Bruce Thompson, Chief Executive Officer 020 7549 5700 Nigel Lingwood, Group Finance Director 020 7549 5705 Ian Seaton, Bankside Consultants 020 7367 8891 NOTE TO EDITORS: Diploma PLC is an international group of specialised distribution businessesoperating in three sectors: Life Sciences - suppliers of consumables, instrumentation and related servicesto research, environmental and clinical diagnostic laboratories. Principalcompanies are Anachem, a1-envirosciences and CBISS in Europe and Somagen inCanada. Seals - Suppliers of hydraulic seals, gaskets, cylinders and attachment kits forheavy mobile machinery. Principal companies are Hercules Bulldog SealingProducts and HKX in North America and FPE in the UK. Controls - Suppliers of specialised wiring, connectors, control devices andfasteners for a range of technically demanding applications. Principal companiesare IS Group in the UK and US, Sommer Filcon in Germany and Hawco in the UK. Within each of these sectors, the Diploma businesses serve industry segmentswith long term growth potential and with the opportunity for sustainablesuperior margins through the quality of customer service, depth of technicalsupport and value adding activities. Further information on Diploma PLC can be found at www.diplomaplc.com This information is provided by RNS The company news service from the London Stock Exchange