Deals



Tyman plc Acquires Giesse


Posted: 8th March 2016 07:56

Tyman plc, a leading international supplier of engineered components to the door and window industry, announces the acquisition of Giesse, an Italian based manufacturer of hardware for aluminium windows and doors.

The Acquisition represents a strategic opportunity to add a design led hardware offering to Schlegel, the Group's International Division, with presence in EMEAI and other markets.

The Acquisition is in line with the Group's strategy to develop and extend the Group's product portfolio through a combination of internal R&D and targeted acquisitions.

Highlights of the Acquisition

  • Enterprise Valuation of €78.9 million (approximately £61.1 million) on a cash / debt free basis, representing an acquisition multiple of 7.31x Giesse's Adjusted EBITDA for the year ended 31 December 2015
  • The Board believes that the Acquisition will provide a number of operational and financial benefits which are expected to create value for Shareholders. In particular:
  • The Acquisition brings to the Group a high quality engineered hardware product offering for the EMEAI aluminium window and door market
  • The Acquisition provides the Group with local presence for the first time in a number of markets worldwide including Argentina, France, Greece, India, Portugal, Turkey and the United Arab Emirates as well as a hardware offering for the Brazilian market, a North American commercial offering and a manufacturing facility in mainland China
  • Giesse's product portfolio and capabilities are highly complementary to those of Schlegel International, which at present derives over 90 per cent. of its revenues from sales of seals and extrusion products Giesse's aluminium door and window products encompass both residential and commercial applications which will broaden the Group's hardware offering in AmesburyTruth and ERA and help open up new routes to market
  • Giesse has well invested strategically positioned facilities with significant capacity through which the Group can drive increased production without the need for major investment
  • Giesse has a highly regarded NPD and engineering team who have developed and brought to market a number of innovative products in recent years and whose expertise will now be available to all Tyman Divisions
  • The Board believes that the acquisition of Giesse will significantly strengthen the Group's existing business model and help deliver its growth objectives
  • Estimated annual pre-tax costs synergies and revenue benefits of at least €4.0 million are expected to be delivered from 2018.  The expected one-off cash costs to implement the integration and delivery synergies are estimated at approximately €4.0 million
  • The Acquisition will be immediately accretive to the Group's underlying earnings per share following Completion and, assuming delivery of the synergy plan and no material deterioration in Giesse's end markets, the Board expects that the ROAI of the Acquisition will meet or exceed the Group's target run rate of 15 per cent. by March 2018*

Financing of the Acquisition

  • The Acquisition and associated expenses will be funded from the Group's cash reserves and a draw down on the Group's existing committed banking facilities

Financial Effects of the Transaction*

  • For the year ended 31 December 2015, Giesse recorded unaudited revenue of approximately €80.8 million (2014: €72.1 million) and Adjusted EBITDA of €10.8 million (2014: €7.1 million)
  • The Acquisition will be immediately accretive to the Group's underlying earnings per share following Completion and, assuming delivery of the synergy plan and no material deterioration in Giesse's end markets, it is expected to meet or exceed the Group's 15 per cent. run rate ROAI target by 2018
  • Estimated annual pre-tax cost synergies and revenue benefits of at least €4.0 million are expected to be delivered from 2018.  The expected one-off cash costs to implement the integration and deliver synergies are estimated at approximately €4.0 million
  • The Board expects Leverage on Completion to be approximately 2.20x (2015 Reported: 1.35x).  Leverage is projected to increase to the half year before reducing towards the Group's year end target range of 1.5x to 2.0x by the end of 2016
  • On the 2015 Proforma Basis, the Enlarged Group's 2015 Revenue would have been approximately £403.1 million and Underlying Operating Profit would have been approximately £55.4 million

* This financial effects statement should not be construed as a profit forecast or interpreted to mean that the future earnings per share, profits, margins, returns on capital or cashflows of the Group will necessarily be greater than the historic published figures or that Leverage will necessarily be lower than the historic
published figures.

Louis Eperjesi, Chief Executive of Tyman, commented:

"The acquisition of Giesse represents a strategic opportunity to add an initial hardware offering to our International Division, Schlegel, as we seek to expand the range of engineered components we can offer our customers in all regions.

"The Acquisition will be immediately accretive* to the Group's underlying earnings per share, will significantly strengthen the Group's existing business model and help deliver our growth objectives.

"Giesse offers an excellent fit with our business model and significantly broadens our coverage of the aluminium window and door market in Europe as well as giving Tyman local presence for the first time in a number of markets world-wide.

"Giesse brings established customer relationships and product development capabilities that will complement our existing businesses and positions Schlegel International to benefit from future market growth.

"On behalf of the Board I am pleased to welcome Giesse's management and employees to the Group."


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