IMI plc Analyst Pack. Acquisition of the Bimba Manufacturing Company

Transcription

1 IMI plc Analyst Pack Acquisition of the Bimba Manufacturing Company

2 An excellent strategic fit The deal is perfectly aligned with IMI s strategic ambitions Increases IMI Group s US revenue percentage from 20% to 23% 1 Consistent with the ambition to expand in Industrial Automation Timing ideally suits Precision Engineering plans and capabilities The acquisition significantly enhances IMI Precision Engineering s position in the US Industrial Automation market Doubles the size of Precision Engineering s US Industrial Automation business Opens access to market-leading distribution network in the US Adds breadth and depth to product offering in existing markets and sectors It makes financial sense US$198m consideration represents adj. EBITDA multiple of 12.4x Earnings enhancing in the first full year of ownership Returns in excess of IMI s cost of capital within three years Clear pathway towards IMI Precision Engineering margins Pro forma net debt to EBITDA post acquisition at 1.3x Note 1: 2016 pro-forma combined sales converted at 1 :US$1.34 FX rate. 2

3 Bimba Manufacturing Company overview $120m leading North American manufacturer of advanced pneumatic products for Industrial Automation Based in Chicago, Illinois with locations in the USA (7), Mexico (1) and the Netherlands (1); plus a market-leading network of distributors 75% actuators, 14% controls, 1% air preparation, 3% safety & production and 7% other products Blue-chip customer base ~500 permanent employees Sales ($m) E Sales by product Sales by vertical Sales by channel 11% 75% 14% Source: Bimba historical sales information for total sales; 2017 estimates sales split by product, vertical and channel. 7% Actuators Industrial Automation Controls Life Sciences Associated Products 93% 5% 10% Distribution 1% 85% E-commerce Private label Direct 3

4 Bimba + IMI Precision Engineering WIN:WIN WORLD-CLASS CAPABILITY IMI operating systems Lean processes Global sourcing Engineering excellence GLOBAL PRESENCE Enhanced capabilities & investment to improve performance LEADING PRODUCTS Actuators (pneumatic, electric, hydraulic) Valves Sensors & switches Vacuum Standard FRLs STRONG U.S. PRESENCE COMPLIMENTARY PRODUCTS Market leading distributor network Excellent customer reputation and relationship Long established installed base FRLs Pneumatic actuators Electric actuators Inline Solenoid Valves Valve Islands Expanded product range and distributor network to drive revenues Pinch Valves Vacuum products 4

5 Integration milestones & objectives Projects Deliverables 2018 Timeline Jan Mar Jun Sep Dec Implement Commercial Strategy First priority will be to present a unified approach to the market Execute Operational Improvement Phase I: Fit for Growth Phase II: Manufacturing Excellence Plan IMI Precision USA Implement IMI Best Practice Prioritise the implementation of IMI systems, procedures and practices to avoid unnecessary disruption Blueprint for the Future Build plans to deliver synergy potential and provide the foundation for accelerated growth of the combined Precision Engineering and Bimba businesses 5

6 An excellent strategic fit Transforms IMI Precision Engineering s position in the US Industrial Automation market Opens access to market-leading distributor network in the US Extends product portfolio and customer offering with mimimal overlap Creates cross-selling opportunities across an enlarged customer base Brings IMI processes and disciplines to BIMBA Clear pathway to improved margins at Bimba Earnings enhancing and returns in excess of cost of capital 6

7 Transaction details Purchase consideration US$198m Cash-free, debt-free after expenses Estimated 2017 adjusted EBITDA multiple of 12.4x Funded through existing bank facilities Cash consideration still leaves strong balance sheet Estimated pro forma Net Transaction conditions Merger clearance Bimba ESOP shareholder approval Completion expected end-january 2018 Investment returns Earnings enhancing in the first full year of ownership Returns in excess of IMI s cost of capital within three years Clear pathway towards IMI Precision Engineering margins 7

8 Financials $m FY 2015 Act FY 2016 Act FY 2017(E) Net sales EBITDA EBITDA margin 12.7% 12.2% 13.3% EBITA EBITA margin 8.6% 7.7% 8.9% Note 1: Adjusted EBITDA for excess ESOP contributions, ESOP administration expenses and other non-recurring items. EBITDA and EBITA includes additional pro-forma US$1.5m for operational resources. 8

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