Halma Regulatory News (HLMA)

Halma plc ('Halma')

ACQUISITIONS

Halma, the leading safety, health and environmental technology group, today announces two acquisitions.

ACQUISITION OF ADVANCED ELECTRONICS LIMITED ('Advanced')

Halma completed the acquisition of Advanced on 14 May 2014.

Advanced manufactures networked fire detection and control systems. Advanced's controllers can be integrated into system solutions using field devices and products from a broad spectrum of suppliers, meeting the increasing diversity of regulatory requirements across the world. Its main manufacturing facility is located near Newcastle in the UK and it has additional commercial offices in the UK, USA and Dubai.

The initial cash consideration for the share capital of Advanced was £14.1 million. Deferred consideration of up to £10.1 million is payable based upon earnings growth for the period to March 2015. Unaudited accounts for the year ended 30 April 2014 report revenue of £14.6 million for the business acquired.

Existing management of Advanced have remained in place and will continue to operate the business. The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's cash and debt facilities.

Advanced will operate as a stand-alone business within Halma's Infrastructure Safety sector, adding complementary products that will help capture the international growth opportunity in the increasingly regulated Fire market.

ACQUISITION OF PLASTICSPRITZEREI AG ('Plasticspritzerei')

Halma acquired Plasticspritzerei on 2 May 2014.

Plasticspritzerei is located in Wolfhalden, Switzerland at the same facility as another Halma subsidiary company, Medicel AG. Plasticspritzerei manufactures plastic components including critical parts for Medicel's ophthalmic products and has been a close commercial partner since Medicel's inception. It has supported Medicel's development into a strong global supplier of devices used to assist in cataract surgery.

An initial cash consideration of CHF 8 million (£5.4 million) was paid for assets which included CHF 0.3 million of cash. Halma then immediately sold the industrial segment of the business to a third party, resulting in a net cash cost to Halma of CHF 4.8 million (£3.2 million). These transactions have resulted in Halma owning only those assets which support Medicel's business.  

Unaudited accounts for the financial year ended 31 December 2013 show revenue of CHF 3.6 million (£2.4 million) for the business retained. The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's existing cash and debt facilities.

Plasticspritzerei will be operated by Medicel's management within Halma's Medical sector, further expanding Halma's manufacturing excellence in ophthalmic diagnostic and surgical instrumentation.

Andrew Williams, Halma's Chief Executive, commented:

"The two acquisitions announced today add important new capabilities to our Infrastructure Safety and Medical sectors.

"Advanced complements Halma's existing Fire business and reinforces our focus on growth in international markets, where fire system product approval regimes are becoming increasingly more challenging to navigate successfully.

"Plasticspritzerei's acquisition secures important production IP, enabling Medicel to maintain and grow its already strong position in the cataract surgical device market. This transaction is another example of Halma finding valuable strategic bolt-on acquisitions to sustain long-term success."

For further information please contact:

Halma plc

Andrew Williams, Chief Executive

Kevin Thompson, Finance Director

+44 (0)1494 721111

MHP Communications

Rachel Hirst / Andrew Jaques

+44 (0)20 3128 8100

Notes

1.

Exchange rate used: CHF 1.49 / £1.

2.

Advanced's products primarily comprise fire control panels and remote terminals; it also supplies various peripherals and complementary products. Advanced concentrates on the market for high-tech, networked fire detection and control systems. The increasingly heavily regulated Fire detection market provides strong global growth opportunities.

3.

Medicel's devices are an essential part of the procedure most often used to introduce the replacement IOL (intra-ocular lens) during cataract surgery. Cataracts are the biggest cause of treatable blindness in developing countries, whilst demand in developed countries is driven predominantly by the ageing population.

4.

Halma buys successful businesses in safety, health and environmental markets helping them grow further through investment targeted towards increasing innovation, management development and international expansion. In the past 10 years Halma has spent over £400m acquiring more than 30 businesses with deal sizes ranging from £70m down to below £1m.

5.

This statement is not intended to constitute a profit forecast for the current financial period or for any future period. In addition, this statement should not be taken to mean that the earnings per share of Halma will necessarily match or exceed the historic reported earnings per share of Halma.

6.

A copy of this announcement, together with other information about Halma, may be viewed on its website: www.halma.com.

7.

Halma's Preliminary Statement of the Final Results for the year ended 29 March 2014 will be issued on 12 June 2014.