Acquisition

RNS Number : 3231Y

Diploma PLC

21 December 2010

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

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FOR IMMEDIATE RELEASE

21 December 2010

DIPLOMA ACQUIRES CARSEN MEDICAL INC.  FOR A MAXIMUM OF £16.1m (C$25.5m) Diploma PLC, the international group of businesses supplying specialised technical products and services, is pleased to announce the acquisition of Carsen Medical Inc ("CMI"), a leading distributor of medical devices and related consumables and services to GI Endoscopy suites in hospitals and private clinics across Canada.  CMI operates from a leasehold facility based in Markham, a suburb of Toronto, Ontario.  The Company employs 34 staff. CMI is the leading supplier in Canada of automated endoscope reprocessors, disinfectants and enzymatic detergents which are used in hospitals and private clinics to clean and disinfect endoscopes. A growing proportion of CMI's revenue is also derived from the distribution of flexible endoscopes and other related products used in the diagnosis and treatment of gastrointestinal diseases. The majority of CMI's products are distributed under long term exclusive agreements with leading manufacturers of specialised medical equipment. CMI supplies products which are complementary to those currently being supplied by the Group's existing AMT Endoscopy business in Canada. The addition of CMI to DCHI, Diploma's Healthcare business in Canada, will provide considerable opportunity for accelerating growth and increasing penetration in the GI Endoscopy market by offering a more complete range of products to existing and new customers. Prior to acquisition by Diploma PLC, CMI was owned equally by its management comprising Mr Bill Vella and Mr Paul Heck, both of whom will remain employed by the company after acquisition and will work closely with management of AMT to realise the full potential of the DCHI businesses in the GI Endoscopy market. CMI's revenues in the year ended 31 July 2010 were C$13.1m (£8.3m).  Its profit before tax was C$1.1m (£0.7m) after shareholder bonuses which will not apply after acquisition.  Gross assets at 31 July 2010 were C$7.7m (£4.9m).  The financial statements of CMI at 31 July 2010 were audited.  At completion, net assets are expected to be approximately C$3.8m (£2.4m), including net debt of approximately C$0.1m (£0.1m). The initial cash consideration to be paid for the business, which will be met from the Group's existing cash resources, is C$22.5m (£14.2m), before acquisition costs.  This may be subject to minor adjustment based on the net assets at completion.  Further deferred consideration up to a maximum of C$3.0m (£1.9m) may be payable depending principally on the operating profit of CMI in the year ending 30 September 2011.  The Board expects this acquisition to be earnings enhancing for the Group in the 2011 financial year. Bruce Thompson, Chief Executive of Diploma PLC said: "This acquisition provides an excellent opportunity to build a broader and more substantial business serving the growing GI Endoscopy market across Canada." For further enquiries please contact: Bruce Thompson, Chief Executive Officer 020 7549 5700 Nigel Lingwood, Group Finance Director 020 7549 5705 Simon Bloomfield, Bankside Consultants 020 7367 8861

NOTE TO EDITORS:

Diploma PLC is an international group of businesses supplying specialised technical products and services to the Life Sciences, Seals and Controls industries.

Diploma achieves stable growth and attractive margins from its focus on supplying specialised technical products to markets which value high levels of customer service, technical support and value adding activities.  A high proportion of revenues are generated from essential products and services funded by operating, rather than capital budgets.

The Group employs ca. 850 employees and its principal operating businesses are located in the UK, Germany, US and Canada.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 14% p.a. through a combination of organic growth and acquisitions.  The current market capitalisation is ca. £300m.

 

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