Diploma Regulatory News (DPLM)

30 Nov 2005 07:00

Diploma PLC30 November 2005 FOR IMMEDIATE RELEASE 30 November 2005 DIPLOMA ACQUIRES HKX, INC FOR A MAXIMUM OF £7.0m (US$12.0m) EXPANSION OF SEALS ACTIVITIES INTO NEW MARKET IN NORTH AMERICA Diploma PLC, the international specialised distribution group, is pleased to announce the acquisition of HKX, Incorporated ("HKX"), a leading provider of hydraulic system kits for the installation of attachments on excavators. HKX is based in Monroe, Washington State, USA where it operates from an 18,000 square foot leasehold facility and employs 27 staff. HKX offers customers a colour coded kit system that simplifies the installation process and substantially reduces the time to install attachments. HKX's principal customers comprise some 200 dealers across the US. The top 10 customers together represent ca. 40% of total sales. HKX's operating profit in the year ended 31 December 2004 was US$1.1m (£0.6m) on sales of US$6.0m (£3.5m). Net assets at 31 December 2004 were US$1.3m (£0.8m) and at completion are expected to be approximately US$2.0m (£1.2m), including net debt of approximately US$0.1m (£0.1m). The initial cash consideration to be paid, which will be met from the Group's existing cash resources is US$10m (£5.8m) before acquisition costs. This may be subject to a minor adjustment based on the net assets at completion. Further deferred consideration up to a maximum of US$2m (£1.2m) will be payable depending on the gross profit of HKX in the years ending 31 December 2005 and 2006. Bruce Thompson, Chief Executive of Diploma PLC said: "The acquisition of HKX represents a strategic expansion of the Group's Sealbusiness into a related market in North America. This is expected to open up further new opportunities for expansion, through exploiting cross-selling opportunities for growth by supplying a broader range of customers and applications and expanding into international markets." For further enquiries please contact: Bruce Thompson, Chief Executive Officer 020 7638 0934 Nigel Lingwood, Group Finance Director 020 7448 4875 Ian Seaton, Bankside Consultants 020 7367 8891 NOTE TO EDITORS: Diploma PLC is a specialised international distribution group operating in threesectors: Life Sciences - Distributors of Instrumentation, Consumables and relatedServices to research, development and diagnostic laboratories. Principal companies are Anachem Group in the UK and Germany, and Somagen in Canada. Seals- Next day delivery of hydraulic seal kits, gaskets and cylinder components, for the repair and maintenance of mobile machinery. Principal companies are Hercules Bulldog Sealing Products in North America and FPE in the UK. Controls - Distributors of specialised wiring, connectors and control devices for a range of technically demanding applications. Principal companies are IS Group in the UK and US, Sommer and Filcon in Germany and Hawco in the UK. Within each of these sectors, the Diploma businesses serve industry segments with long term growth potential and with the opportunity for sustainable superior margins through the quality of customer service, depth of technical support and value adding activities. For the year ended 30 September 2005 the Group reported turnover of £111.3m(2004: £100.5m) and profit before tax, exceptional items and goodwill amortisation of £16.6m (2004: £13.1m); adjusted earnings per share were 52.4p (2004: 41.2p) and dividends per share were 20.0p (2004: 17.0p). 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