Acquisition
Avon Rubber PLC
21 June 2005
Embargoed until 0700 hrs on 21 June 2005
Avon Rubber p.l.c.
ACQUISITION OF INTERNATIONAL SAFETY INSTRUMENTS, INC
Avon Rubber p.l.c. (Avon) announces that it has today acquired International
Safety Instruments, Inc (ISI), a leading manufacturer of self-contained
breathing apparatus (SCBA) based in Georgia, USA for a total consideration of up
to $22.7 million.
Avon has identified respiratory protection as a major growth area for the Group,
which is the prime contractor for the new United States Joint Services General
Purpose Mask (JSGPM), entering production towards the end of 2005. Avon also
supplies nuclear, biological and chemical respiratory protection equipment for
use in high risk areas such as the nuclear industry as well as for first
responders in law enforcement and medical support in both Europe and North
America. The Group has identified the military and emergency services markets as
key areas of activity for future growth. Avon recognises that it needs to
develop or acquire certain technologies to have a broader product offering in
these markets. SCBA is a key technology required to complement its present
product range.
ISI was founded in 1980 by its present owner and CEO, Donald W Dawson, who will
continue in his current executive role for the foreseeable future. ISI has
developed a leading position in SCBA technology which is used in environments
which pose an immediate danger to life and health (IDLH), such as fire-fighting.
Based in Lawrenceville, Georgia, ISI manufactures and supplies SCBA and thermal
imaging equipment to emergency services, particularly fire services, through a
distributor network in the United States and 31 countries worldwide. ISI brings
to the Group strong experience and a reputation for innovation in SCBA and
related technologies. Products such as ISI's Viking range of breathing
apparatus, which is NIOSH CBRN and NFPA 2002 approved, are noted for their
comfort and ease of use in ISI's United States home market and, meeting the
latest standards, offer advantages for professional users worldwide. The
combination of ISI's SCBA technology and Avon's existing product range, as well
as complementary distribution networks for military and emergency services
markets, offers the opportunity for accelerated growth, both for ISI and for
Avon's existing business.
ISI's continuous drive to develop leading edge technology and incorporate it
into its products resulted in their receiving Frost & Sullivan's 2005
Environmental Health & Safety Global Excellence in Technology Innovation Award,
with the following comment:
'ISI has over the years demonstrated an ongoing ability to develop and market a
variety of cutting-edge, customized products for use by law enforcement,
industry, and the fire services. The company has also demonstrated a commitment
to proper, after-the-sale product implementation and usage by offering training
courses at several proficiency levels. It is in recognition of these
achievements that Frost & Sullivan is pleased to bestow International Safety
Instruments with the 2005 Global Excellence in Technology Innovation Award.'
ISI is being acquired from the Donald Dawson Family Limited Partnership through
the purchase of 100% of the share capital in its holding company Precision Hydro
Testing, Inc. for an initial cash consideration of US$20.7 million. Further cash
consideration up to a maximum of US$2 million may become payable in December
2007 subject to Mr Dawson's remaining with the Group.
The transaction will be funded by Avon from its existing resources. The
acquisition is expected to be earnings enhancing in the first year, before the
expected synergies are taken into account. ISI had tangible net assets of $6.8
million at 31 December 2004 and recorded a continuing profit before interest and
tax of $3.4 million in the financial year ended on that date.
Commenting on the acquisition, Steve Willcox, Chief Executive of Avon Rubber,
said: 'Avon has identified Protection as an area for strategic growth and the
acquisition of ISI brings technology, new products and access to distribution
channels which complement our existing military and law enforcement products and
routes to market. As we approach the increasing integration of systems for
military and emergency services, access to technologies such as self-contained
breathing apparatus will add significantly to our capabilities'.
Terry Stead, Chief Executive Designate commented: 'The Acquisition of ISI is a
significant step forward for Avon and its business in the Protection area. As I
assume the role of Group CEO I look forward to working with Avon Protection
Systems and the other Avon businesses and developing a group that will deliver
increasingly attractive returns to shareholders. To this end I will be reviewing
the options available to enhance value delivery from the Group's operations'.
< ends >
For further enquiries, please contact:
Avon Rubber p.l.c. 01225 861100
Terry Stead, Chief Executive Designate
Jayne Hunt, PR Executive
Weber Shandwick Square Mile 020 7067 0700
Richard Hews
Rachel Taylor
Stephanie Badjonat
This announcement contains certain statements that are forward-looking. These
statements involve risk and uncertainty because they relate to events and depend
on circumstances that will occur in the future. Forward-looking statements are
not guarantees of future performance. The Group's actual results of operations,
and the development of the industries in which the Group operates, may differ
materially from those made in or suggested by these statements and a number of
factors could cause the results and development to differ materially from those
expressed or implied by these forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange GGUG