Less Ads, More Data, More Tools Register for FREE

Pin to quick picksECM.L Regulatory News (ECM)

  • There is currently no data for ECM

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Acquisition

24 May 2018 07:00

RNS Number : 1043P
Electrocomponents PLC
24 May 2018
 

24 May 2018

Electrocomponents announces acquisition of IESA

· Acquisition of leading corporate MRO(1) marketplace provider of value-added services

· Significantly enhances the Electrocomponents service offer to corporate customers

· Expands existing eCommerce offer and platform technology capabilities

· Electrocomponents brings scale benefits to IESA and potential to accelerate growth

· Accretive to adjusted(2) earnings per share and expected to meet our cost of capital in year one

In line with our strategy to build out our value-added service proposition, Electrocomponents plc is pleased to announce that it has reached agreement to acquire IESA, a leading provider of value-added services to industrial customers for a cash consideration of £88 million.

IESA provides value-added services in three key areas: sourcing; transaction processing; inventory and stores management. Its services allow clients to improve their efficiency and consolidate their indirect procurement vendor base via a cloud-enabled proprietary marketplace solution, MyMRO. MyMRO was developed specifically to meet the indirect procurement challenges of large-scale clients, it integrates thousands of approved MRO vendors on to its proprietary marketplace and offers its client base complete invoice consolidation for all transactions. IESA operates a fee-for-services model to corporate clients, primarily in the UK.

The acquisition of IESA will enhance and accelerate the Electrocomponents value-added services offering, giving it additional capabilities to service corporate customers who choose to outsource their MRO and other indirect purchases and inventory management. IESA's fully integrated indirect supply and comprehensive stores solutions complement Electrocomponents' existing product and value-added service capabilities giving it a full service end-to-end solution for customers.

As part of Electrocomponents, IESA and its clients will benefit from the scale and international spread of the broader Group. Electrocomponents' relations with international suppliers will enable IESA to enhance its offering to its clients, whilst at the same time the Group's international sales presence and digital capabilities should enable IESA to grow revenue at a faster rate. RS and RS Pro are already suppliers to IESA and there are opportunities to further develop this relationship over time.

The acquisition is expected to be accretive to Electrocomponents' adjusted (2) operating profit margin(3) and to enhance adjusted(2) earnings per share in the first year of ownership. We expect the acquisition to meet our cost of capital in the first year of ownership.

LINDSLEY RUTH, CHIEF EXECUTIVE OFFICER, COMMENTED:

"The acquisition of IESA will improve our value-added services proposition, significantly enhancing our offer for customers. We believe the combined digital capability of IESA and Electrocomponents is a market differentiator and will greatly enhance the experience we can offer our customers and suppliers with a much wider range of eCommerce-led solutions. We are excited to welcome IESA to the Electrocomponents Group."

The IESA business

IESA is based in Warrington, near Manchester in the UK and employs 500 people, 350 of whom work on site at client facilities. IESA has over 27,000 suppliers and its client base is primarily in the UK manufacturing, assembly and process industries. IESA's proprietary platform, MyMRO, is integrated into clients' own systems providing them with the opportunity for cost savings and inventory reduction. IESA also offers training and consultancy to drive continuous improvement leading to inventory optimisation benefits. For more information see www.iesa.co.uk.

Total gross income for IESA for the year ended 30 March 2018 was £232 million, however this includes inventory pass through revenues of £207 million reflecting IESA's sourcing activities. Revenue of £25 million represents IESA's value-added services fee revenue. Adjusted(2) operating profit for the year ended 30 March 2018 was £7 million. Over 90% of IESA's revenues are from the UK market, with the balance primarily in Europe. In 2018 IESA saw strong double-digit growth in fee revenue from adding new client contracts.

IESA will be run as a separate business unit within Electrocomponents, with the existing CEO reporting to Lindsley Ruth.

Acquisition details and financing

Electrocomponents has entered into an agreement to acquire IESA (AGHOCO 1079 Limited), from Gresham Private Equity and others for £88 million on a cash-free and debt-free basis, subject to customary adjustments. The acquisition is expected to complete by the end of May 2018 and will be financed out of a new £120 million term loan, which is also available for general corporate purposes.

The acquisition constitutes as a class 2 transaction for the purposes of the UK Financial Authority's Listing Rules. Total gross assets for the year ended 30 March 2018 were £121 million.

 

1) Maintenance repair and operations (MRO).

2) Adjusted excludes amortisation of acquired intangible assets, substantial reorganisation costs, asset write-downs and one-off pension credits or costs, significant tax rate changes and associated income tax.

3) Adjusted operating profit margin is adjusted operating profit as a percentage of revenue.

 

 

Enquiries:

 

Lindsley Ruth, Chief Executive Officer

Electrocomponents plc

020 7239 8400

David Egan, Group Finance Director

Electrocomponents plc

020 7239 8400

Polly Elvin, VP of Investor Relations

Electrocomponents plc

020 7239 8427

Martin Robinson / Lisa Jarrett-Kerr

Tulchan Communications

020 7353 4200

 

Notes to editors:

Electrocomponents, through its brands RS Components (RS) and Allied Electronics and Automation (Allied), is the global distributor for engineers. We offer more than 500,000 industrial and electronic products, sourced from 2,500 leading suppliers, and provide a wide range of value-added services to over one million customers. With operations in 32 countries, we trade through multiple channels and ship around 50,000 parcels a day.

We support customers across the product life cycle, whether via innovation and technical support at the design phase, improving time to market and productivity at the build phase, or reducing purchasing costs and optimising inventory in the maintenance phase. We offer our customers tailored product and service propositions that are essential for the successful operation of their businesses and help them save time and money.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
ACQPGUMWAUPRPUW
Date   Source Headline
6th Jul 20111:18 pmRNSDirector/PDMR Shareholding
1st Jul 201111:19 amRNSTotal Voting Rights
30th Jun 201112:57 pmRNSDirector/PDMR Shareholding
23rd Jun 20119:23 amRNSDirector/PDMR Shareholding
21st Jun 201111:48 amRNSAnnual Information Update
20th Jun 201110:30 amRNSNotice of Interim Management Statement
15th Jun 20119:07 amRNSAnnual Financial Report
27th May 20111:03 pmRNSHolding(s) in Company
27th May 20117:00 amRNSFinal Results
7th Apr 20112:55 pmRNSHolding(s) in Company
7th Apr 20117:00 amRNSTrading Update
1st Apr 201110:29 amRNSHolding(s) in Company
31st Mar 201111:17 amRNSTotal Voting Rights
29th Mar 201110:01 amRNSDirector Declaration
23rd Mar 20117:00 amRNSAppointment of joint corporate broker
21st Mar 201111:35 amRNSDirector/PDMR Shareholding
11th Mar 201110:02 amRNSHolding(s) in Company
9th Mar 201111:02 amRNSHolding(s) in Company
1st Mar 201110:02 amRNSTotal Voting Rights
25th Feb 20113:02 pmRNSDirector/PDMR Shareholding
15th Feb 20111:14 pmRNSHolding(s) in Company
4th Feb 20117:00 amRNSInterim Management Statement
31st Jan 20111:10 pmRNSTotal Voting Rights
14th Jan 201111:47 amRNSNotice of IMS
1st Dec 20109:40 amRNSTotal Voting Rights
12th Nov 20107:00 amRNSHalf Yearly Report
10th Nov 201011:16 amRNSHolding(s) in Company
3rd Nov 20101:24 pmRNSHolding(s) in Company
3rd Nov 20101:24 pmRNSHolding(s) in Company
1st Nov 201010:53 amRNSTotal Voting Rights
1st Nov 20109:00 amRNSElectrocomponents Appoints New Head of eCommerce
1st Oct 20102:38 pmRNSDirectorate Change
1st Oct 201010:44 amRNSTotal Voting Rights
14th Sep 20103:37 pmRNSHolding(s) in Company
2nd Sep 20102:44 pmRNSTotal Voting Rights
17th Aug 201010:34 amRNSHolding(s) in Company
12th Aug 20102:33 pmRNSTotal Voting Rights
9th Aug 20102:00 pmRNSChairman Designate - Shareholding
2nd Aug 20102:47 pmRNSBlocklisting Interim Review
30th Jul 201011:23 amRNSTotal Voting Rights
30th Jul 201010:07 amRNSDirector Declaration
30th Jul 201010:04 amRNSDirectorate Change
16th Jul 20109:40 amRNSDirector/PDMR Shareholding
15th Jul 20101:49 pmRNSResult of AGM
15th Jul 20107:00 amRNSInterim Management Statement
9th Jul 20102:39 pmRNSAdditional Listing
2nd Jul 20102:26 pmRNSNotice of IMS
2nd Jul 20101:39 pmRNSAnnual Information Update
1st Jul 20102:15 pmRNSDirector/PDMR Shareholding
1st Jul 201011:32 amRNSTotal Voting Rights

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.