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Spirax-Sarco Engineering PLC on Wednesday said it has agreed to acquire Durex International Corp for $342.2 million.
The transaction will be on a cash- and debt-free basis, meaning Spirax-Sarco will not assume either Durex's debt or its excess cash. It will be financed through acquisition bank facilities and will be accretive to group earnings in 2023. Completion of the deal is expected in October 2022, following regulatory approval.
Spirax-Sarco is a Cheltenham, Gloucestershire-based thermal energy management and pumping systems company.
Durex is a privately-owned US-based specialist in electric thermal solutions for industrial equipment. It provides original equipment manufacturers with ‘custom-designed precision thermal solutions’ as well as cooling and sensing technologies. Spirax-Sarco says Durex is ‘well positioned’ to capitalise on the trend of ‘increasingly stringent thermal demands in high technology equipment and processes’.
89% of Durex's sales were to OEMs, which Spirax-Sarco noted, ‘tend to be highly recurring in nature’. 60% of total sales to OEMs were in the semiconductor sector.
According to Spirax-Sarco, Durex has a ‘strong track record of top line growth and profitability’. For the 12 months to August 31, revenue was $74.5 million while earnings before interest, tax, depreciation and amortisation was $25.3 million.
Durex will be incorporated into the company's electric thermal solutions business alongside Chromalox Inc and Thermocaox Ltd.
Chief Executive Officer of Spirax-Sarco said: ‘We are excited about this opportunity to further strengthen our ETS business and look forward to welcoming colleagues from Durex into our group. We have great respect and admiration for Durex that has grown and developed under the skilful leadership of Ed Hinz, who founded the business over 40 years ago.’
Shares in Spirax-Sarco were trading 0.2% lower at 10,115.00 pence each in London on Wednesday morning.
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