Halma - Aquisition

DividendMax Ltd.

Halma - Aquisition

Halma plc ('Halma')

ACQUISITION OF BAODING LONGER PUMP

Halma, the leading safety, health and environmental technology group announces the completion on 23 January 2013 of the acquisition of Thinketron Precision Equipment Company Limited ('TPE') based in Hong Kong and its subsidiaries Baoding Longer Precision Pump Co., Ltd ('Longer Pump') based in China and Langer Instruments Corporation ('LIC') based in the USA.

Longer Pump manufactures and markets peristaltic, syringe and gear pumps used in laboratory, medical and industrial applications. LIC is Longer Pump's distributor in the USA.

The initial cash consideration was RMB 237 million (£23.7 million) for the share capital of TPE.  Deferred consideration of RMB 3 million (£0.3 million), which is adjustable RMB for RMB if the net tangible asset value (NTAV) is over/under a targeted amount, is payable upon agreement of the NTAV. The targeted NTAV includes approximately RMB 22.5 million (£2.25 million) of cash.  

Unaudited accounts for the year ended 31 December 2012 show adjusted operating profit of RMB 23.5 million (£2.35 million).  Audited accounts for the year ended 31 December 2011 show adjusted operating profit of RMB 18.2 million (£1.82 million).

Existing management of Longer Pump and LIC will remain in place and will continue to operate the business supported by new Board members appointed from within Halma China. The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma's cash and debt facilities.

Longer Pump will join Halma's Health & Analysis sector within the Fluid Technology sub-sector adding complementary high-value fluid handling products which are sold through a large sales network in China. Approximately 80% of Longer Pump's revenue is generated from China.

Andrew Williams, Halma's Chief Executive, commented:

"Longer Pump's alignment with Halma's growth drivers is strong. Sales of their products are driven by increasing demand for healthcare and healthcare research, as well as the urbanisation and industrialisation within China. Their significant local market knowledge and technical resources will help our Fluid Technology sub-sector accelerate growth in this important region.

There are also opportunities for Halma to contribute to the growth of Longer Pump, utilising both the network of regional hub offices which Halma has established within China and the worldwide reach of our Fluid Technology businesses."

Companies mentioned