Smiths Group buys US-based manufacturer HCP in $82m deal
- Engineering giant said it bought HCP for $82m (approximately £65m)
- London-based company said HCP will be integrated into its Flex-Tek division
Smiths Group has acquired Heating and Cooling Products (HCP), a US-based manufacturer of heating, ventilation and air conditioning solutions.
The engineering firm says it has acquired HCP for $82million (£65million) on a cash and debt-free basis from a private seller for less than seven times this year’s earnings before interest, taxes, depreciation, and amortization (EBITDA) figure.
The London-based company also revealed that HCP will be integrated into its Flex-Tek division.
The engineering giant revealed that it had acquired HCP for $82m (approximately £65m)
The firm also said it will further expand the group’s presence in North America, allowing it ‘to serve customers with an even broader product range, including HCP’s patented axial and radial seal duct technology which improves energy efficiency’.
Smiths Group shares are up by 0.86 per cent to £16.36 at lunchtime trading on Wednesday.
Paul Keel, chief executive of Smiths Group, said: ‘Smiths has now posted eight straight quarters of growth, and the addition of HCP allows us to further build on this momentum by adding synergistic capabilities, through an accretive transaction, in a market we know well.
‘We welcome our new colleagues from HCP to Smiths.’
In March, Smiths Group upped its annual guidance following record organic first-half revenue growth thanks to favourable currency swings and construction product demand.
The group anticipates organic revenues will swell by 8 per cent or more this fiscal year, compared to a previous forecast made in January for at least 7 per cent growth, which was itself an increase on a prior outlook.
Total sales jumped by £305million to just shy of £1.5billlion for the six months ending January, a rise of around a quarter year-on-year, with beneficial foreign exchange movements being responsible for over 40 per cent of growth.