Flowtech Fluidpower PLC Acquisition of Orange County Ltd, County Durham (5215K)

TIDMFLO

RNS Number : 5215K

Flowtech Fluidpower PLC

10 July 2017

 
 NEWS RELEASE 
  Issued on behalf of Flowtech 
  Fluidpower PLC 
  Immediate Release (07.00hrs) 
 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

FLOWTECH FLUIDPOWER PLC

("Flowtech", the "Group" or "Company")

Acquisition of Orange County Limited

London: Monday, 10 July 2017: AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: symbol FLO), is pleased to announce the further strengthening of its Process division through acquisition of Orange County Limited ("OCL" or the "Acquisition").

ACQUISITION OF ORANGE COUNTY

On Friday, 7 July 2017, Flowtech completed the acquisition of the business and assets of OCL, an exclusive UK supplier and distributor of high-quality products for the storage and movement of fuels, liquids and gases.

OCL was founded in 1994 and holds a market leading position in the UK. The business employs in total 18 people at its site in Spennymoor, County Durham. OCL will operate as an independent sister company within the Flowtech Group and will continue to be managed by the current executive management team who have been in place for many years, reporting directly to Flowtech's CEO, Sean Fennon.

The Acquisition provides a further complementary business to the Group and establishes relationships with world-leading manufacturers of pipes, valves, gauges and leak detection equipment, including Brugg Pipesystems in Germany and Ebsray Pumps in Australia. It is focused on technical sales, provided by experienced sales engineers to a wide range of end users from fuel supply systems for the automotive industry to cooling systems on the London Underground, as well as large Data Centres across the UK.

For the year ended 31 December 2016, OCL achieved sales of GBP4.1 million producing EBIT of GBP1.0 million. Net assets excluding net cash at the same date were GBP0.8 million. As well as some immediate back office savings, the Group expects to deliver synergy opportunities over the medium term by exploiting the OCL offer across the Group's wider customer base, as well as enhancing internal supply arrangements.

The Acquisition is being funded from Flowtech's own resources and comprises GBP1.5m on completion with additional payments expected to be cGBP2.1m subject to an earn-out over the 24-month period to 30 June 2019. The maximum consideration payable is GBP9.0m. In addition, the Group will pay a sum of GBP1.7m equivalent to the net cash resources of OCL at the same date. With adjustments to the salary base for the management team post acquisition and current exchange rates reducing margins from previous highs, the Board expects OCL to contribute annual EBIT of cGBP0.6m in the short to medium term.

Sean Fennon, CEO Flowtech Fluidpower plc commented:

"OCL is the third acquisition we have made this year and we are delighted to expand our knowledge base, add complementary technical products and skilled engineers to the Group's already robust customer offering. We take this opportunity to welcome all new colleagues to the Group and see this momentum as an exciting opportunity for everyone. We remain committed to our strategic objective of building a focused Fluid Power Group that serves a wide number of industry sectors."

Enquiries:

Flowtech Fluidpower plc

Sean Fennon, CEO

Bryce Brooks, CFO

Tel: [phone]

Email: [e-mail]

Note: Flowtech Fluidpower plc has also released a pre-close Trading update for the interim period ended 30 June 2017.

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   EDITORS' NOTES 
 
   About Flowtech Fluidpower plc: 
   AIM: symbol: FLO 
   Website: www.flowtechfluidpower.com 
 
   The business was founded as Flowtech in 1983, 
   and is the UK's leading specialist supplier 
   of technical fluid power products. The Flowtech 
   Group has three divisions: Flowtechnology, 
   Power Motion Control and Process. All three 
   of the Group's divisions have overlapping product 
   sets, allowing procurement synergies to be 
   maximised. 
 
   The Flowtechnology division focuses on supplying 
   distributors and resellers of industrial MRO 
   (maintenance, repair and operation) products, 
   primarily serving urgent orders rather than 
   bulk offerings. It is formed from Flowtechnology 
   UK, Flowtechnology Benelux and Indequip. It 
   offers an unrivalled range of Original Equipment 
   Manufacturer (OEM) and Exclusive Brand products 
   to over 3,400 distributors and resellers and 
   the catalogues are recognised as the definitive 
   source for fluid power products, containing 
   100,000 individual product lines and are distributed 
   to more than 80,000 industrial Maintenance, 
   Repair and Overhaul end users (MRO). The Power 
   Motion Control division specialises in the 
   design, assembly and supply of engineering 
   components and hydraulic systems and is further 
   enhanced by a service and repair function. 
   The division is formed from Primary Fluid Power, 
   Nelson Hydraulics, TSL Fluidpower and HTL. 
   The Process division focuses on the supply 
   of industrial components to the process sectors. 
 
   The Group's main distribution centre is in 
   Skelmersdale, Lancashire with further distribution 
   centres in the Netherlands and China. The Power 
   Motion Control division (PMC) has operations 
   in Merseyside, Northern Ireland, the Republic 
   of Ireland, Shropshire and Yorkshire; Process 
   operates from the West Midlands & County Durham. 
   In total, the business employs 318 people. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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July 10, 2017 02:00 ET (06:00 GMT)