Diploma Acquires Cablecraft Limited
Diploma PLC, the international group of businesses supplying specialised technical products and services, is pleased to announce the acquisition of 100% of Cablecraft Limited, a group of businesses headquartered near Dunstable in the UK and providing essential cable identification, management and termination products and solutions to a broad base of primarily UK based customers. This transaction will be immediately earnings enhancing to the Group and will be reported as part of the Controls Sector activities.
Cablecraft is a long established and leading supplier of cable accessory products which are used to identify, connect, secure and protect electrical cables. The business supplies to wholesalers, distributors and end-users in a range of industries including Electrical contracting, Control panel building, Rail and signalling engineering and Energy & Utilities.
Cablecraft supplies products from leading branded manufacturers, but also manufactures the Betaduct branded range of control panel trunking from its Tewkesbury facility and manufactures heat shrinkable sleevings and specialist thermal insulation products from its facility in Plymouth. The Cablecraft group of businesses employs 98 staff across its three locations in the UK.
Prior to acquisition, Cablecraft was owned by Christopher Jenart and Ian King-Lee, joint Managing Directors and their immediate family (Linda Jenart and Susan King-Lee). Both Christopher Jenart and Ian King-Lee will remain with the business in their current roles until at least 31 March 2017 to ensure a smooth management transition.
Audited consolidated financial statements for the year ended 31 March 2015 reported that profit before tax for Cablecraft was £3.5m on revenues of £15.4m; the remuneration of the Managing Directors has largely been taken in the form of dividends, rather than salaries. Gross assets at 31 March 2015 were £11.0m.
The initial net cash consideration to be paid on Completion will be £21.0m, before acquisition costs, which will be met from the Group's existing cash resources and revolving bank credit facility. Deferred consideration up to a maximum of £5.0m will be payable based on Earnings Before Interest and Tax achieved in each of the 12 month periods ending 31 March 2016 and 2017.
At Completion, net assets are expected to be ca. £10m, including cash of ca. £6m and freehold property of £1.1m, which will be sold to the vendors and leased back to the business. The cash and the property proceeds will be included in the gross consideration.
Bruce Thompson, Chief Executive of Diploma PLC said:
"The acquisition of Cablecraft is an exciting addition to our Controls Sector. It supplies a range of essential products that are similar to those supplied by the IS-Group but extends substantially both the product range and the industrial end markets served. The acquisition fits very well with Diploma's strategy of building a larger, broader base of specialised businesses in the Controls Sector. The acquisition also opens up opportunities for cross selling products with Diploma's other Controls Sector businesses."