acquisition Yorkshire Fittings and Woeste 'Yorkshire' in United Kingdom
- acquisition Yorkshire Fittings and Woeste 'Yorkshire' (United Kingdom)
- full package copper and brass fittings, one of largest on European market
- 800 employees, annual revenue approximately EUR 140 million
Aalberts becomes Europes biggest fittings producer
Aalberts Industries, a leading internationally operating industrial group quoted on Euronext Amsterdam, is to purchase the fittings division of IMI plc of the UK (Yorkshire Fittings and Woeste 'Yorkshire'). The transaction makes Aalberts Industries into Europe’s biggest supplier of fittings for water, gas, heating and cooling. The fittings activities, most of which operate in the market under the Yorkshire Fittings and Woeste 'Yorkshire' brand names, have a combined workforce of approximately 800 and booked turnover of some EUR 140 million in 2001. Operating results were EUR 14 million.
The acquisition embraces fittings production operations located mainly in England, Scotland and Hungary, together with sales and logistics activities in Germany, Spain and Italy.
The current management team are to remain with the company.
Yorkshire Fittings has significant shares of the German, Spanish, French and East European markets and is a leading producer in the United Kingdom with up-to-date production facilities.
With a full package of copper and brass fittings, the company is one of the largest on the European market. It also supplies British Commonwealth countries, which represent an important export market outside of Europe.
With that the acquisition is in accordance with Aalberts Industries' strategy of further expanding its current position in the market for Flow Control Systems. By taking up the leading role in Europe in the area of fittings the overall position of Aalberts Industries will be bolstered in the European market for Flow Control Systems. Also this acquisition will substantially improve the market position of the Aalberts Industries Group in the UK. In addition the product package supplied by Yorkshire Fittings/Woeste 'Yorkshire' strongly complements the current Aalberts Industries product range.
With this takeover Aalberts Industries has not only acquired a powerful springboard for further growth in the European market in fittings, but specifically also in a number of niche segments such as the market for heating and drinking water systems.
In addition to improved profit margins for the acquired operations themselves – emerging from the optimisation programme currently being implemented – partnership with the other operations in the Aalberts Industries Group will generate significant synergetic benefits:
- Corresponding synergetic benefits can be expected from the merging of sales and/or distribution activities mainly in the UK, Spain, Italy and Scandinavia and elsewhere, as well as a central distribution operation in Germany.
- Joint product development and market development
- Considerable benefits could emerge from collaboration in the area of production and applied production technologies.
- Joint purchasing of raw material (Aalberts Industries becomes one of the largest users of copper and brass in Europe).
It will take 18 months for the advantages of these collaborative opportunities to be felt in full.
The acquisition involves a transaction worth some eur 65 million. In addition, Aalberts Industries assumes existing loans amounting to some eur 40 million. The takeover sum will be financed through a package arranged by Rabobank, consisting of loans and the issue of a maximum 1.5 million shares.
Over the full year 2002 Yorkshire Fittings forecasts a turnover of around eur 130 million and a considerably better operating result in relation to 2001. With that, the take-over will contribute directly to an increase in earnings per share Aalberts Industries over 2002 as a whole. The results of the acquired companies will be consolidated from 1 August 2002.
Based on current expectations, results booked by Aalberts Industries N.V. in the first half of 2002 will be in line with its 2001 performance. Barring unforeseen circumstance and taking the share issue into consideration, earnings per share over 2002 as a whole – as a consequence of internal growth as well as the acquisition – could rise by a double digit percentage.
Full consolidation, partnership effects and the completed optimisation programme may generate further structural growth in returns on investment in 2003 and subsequent years.