Spectris plc Acquires Millbrook Group
Spectris plc, the productivity-enhancing instrumentation and controls company, today announces that it has completed the acquisition of the entire share capital of Millbrook Group Limited ("Millbrook") from Rutland Partners and Millbrook's management shareholders. The purchase consideration of £122 million, on a debt and cash-free basis, (of which £3.4 million is deferred for 24 months) will be met from existing cash and bank facilities.
Millbrook is one of Europe's leading test, validation and engineering service providers primarily for the automotive and related markets such as tyres, petrochemical, defence and security. Established in 1968, Millbrook was sold by General Motors ("GM") to Rutland Partners and Management in 2013 and from that point it has been transformed from a GM dependent business to one with a broad base of UK and international clients and test and validation services. Furthermore, in September 2015, Millbrook acquired Test World, a leading winter vehicle and tyre testing business within the Arctic Circle, based in Finland. Millbrook's services and capabilities allow customers to speed up their product design and launch processes and, in turn, improve their return on development investment. The business' UK test tracks and facilities are located on a wholly-owned 665 acre site in Millbrook, Bedfordshire that has scope for further related commercial development.
Millbrook has undertaken significant growth capital expenditure programmes in 2015 and in 2016, from which trading in 2016 is expected to benefit considerably. Trading in 2016 will also be enhanced by the full year impact of the Test World acquisition and continued high levels of organic growth from non-GM customers. Revenue in the year to December 2015 was £48 million and earnings before interest, tax, depreciation and amortisation ("EBITDA") was £5.4 million. On a proforma basis, using the expected 2016 exit run-rate EBITDA (adjusted for the full year impact of Test World and the capital expenditure projects), the consideration represents a 12-13x EBITDA multiple. Beyond 2016, the business has significant opportunities to accelerate its growth with a range of customers, and in key areas of testing, through further customer-supported investment in capabilities and facilities. Millbrook will become a separate operating company within Spectris' Test and Measurement segment. More information on Millbrook can be found at www.millbrook.co.uk. The gross assets of Millbrook at December 2015 were £44.8 million.
John O'Higgins, Chief Executive, said: "Millbrook represents our largest purchase to date of a pure testing services business. It is closely related to our existing instrumentation businesses and, as such, the acquisition is an important step forward in the realisation of the Group's strategy to provide our customers with differentiated solutions that incorporate a combination of hardware, software and services. Supported by Spectris' global reach and expertise, the combination of Millbrook's service excellence and the testing equipment and software in other Spectris operating companies will help customers address the increasing complexities involved in product testing whilst reducing the time to market for new products. We believe that there is a significant opportunity for Millbrook to strengthen its market position and accelerate its growth through continuing its recent capital investments and making bolt-on acquisitions to expand internationally and broaden its service portfolio."