Acquisition
Smiths Group PLC
1 October 2002
Smiths agrees £235 million cash acquisition of market leader in X-ray detection
Smiths Group today announced that it has reached agreement with Rheinmetall
Group of Germany to acquire its specialist X-ray business, Heimann Systems GmbH,
for £235 million (Euros 375m) in cash. The acquisition will be funded from
Smiths' existing borrowing facilities and is subject to the approval of the
relevant national regulatory authorities in Europe.
Heimann is the world's market leader in X-ray security systems. The products
are primarily used in transportation security for inspecting luggage and freight
to detect explosives and other hazardous or illegal contents. The equipment is
also used to inspect mail, and to detect metal or other foreign matter.
Combining Heimann with Smiths' trace detection technologies, which detect
biological and chemical agents, explosives and narcotics, will give Smiths a
unique ability to create integrated systems for the growing security market,
worldwide. Another of Heimann's technologically advanced activities is biometric
systems for the digital registration of fingerprints and palmprints, for law
enforcement and civilian use.
Commenting on this significant expansion of its core Detection business, Smiths'
chief executive Keith Butler-Wheelhouse said: 'Heimann, our fourth Detection
acquisition, makes Smiths a world leader in integrated security systems, and
will substantially increase the size of our addressable markets in homeland
defence and security, by broadening our customer, product and geographic base.'
Heimann's turnover in the financial year ended 31 December 2001 was £104 million
(Euros 167m), earning pre-tax profits of £14 million (Euros 21m). Heimann is
showing strong growth and in the financial year to date, has increased sales by
more than 50% over the previous year, driven by rapidly growing worldwide demand
for enhanced security systems. The company has net assets of £19 million (Euros
30m), subject to final adjustment at completion.
Smiths Group has market leading positions in aerospace systems, medical devices,
mechanical & polymer seals, and interconnect products. For further information,
visit www.smiths-group.com
For details of Investor conference call, see note at the end of this
announcement.
Press enquiries to: Investor relations enquiries to:
Bernard Carey or Richard Bayliss Russell Plumley
Tel: +44 (0)20 8457 8403 Tel: +44 (0)20 8457 8203
Note to editors:
Smiths entered the detection market in 1997 with the acquisition of Graseby plc,
which developed Ion Mobility Spectrometry technology, at its Watford (UK)
facility, for the detection of chemical warfare agents. Its products are now
used for both defence and civilian applications. Environmental Technologies
Group Inc. (ETG), located in Baltimore, Maryland, was acquired by Smiths in
1999. ETG had established a leading position in the supply of hand-held
nuclear, biological & chemical agent detectors for military forces and the
public emergency services. A third business, Barringer Instruments, joined
Smiths in 2001. With facilities in the US and Canada, it specialises in
equipment to detect and identify trace amounts of explosives and illegal drugs.
These three international businesses were combined earlier this year to create
Smiths Detection.
Heimann Systems is based in Wiesbaden, near Frankfurt, with subsidiary
businesses in the US, UK, France, Canada and Singapore. There is an established
service and support organisation which will also benefit the international
development of Smiths Detection. The company was founded in 1946 and was part
of Siemens prior to its acquisition in 1993 by Rheinmetall, an international
defence, electronics and automotive group. Of the 700 Heimann employees
worldwide, around 450 are located in Germany.
The principal product areas for Heimann are X-ray systems which produce an image
of the contents of luggage, freight or mail and are used for explosives
detection, cargo inspection, and to identify product defects. As a world leader
in explosive detection X-ray systems, Heimann's technology is complementary to
Smiths' trace detection products, providing the opportunity to supply complete
integrated identification systems.
Through a comprehensive subsidiary and distribution network, Heimann has
consistently achieved strong sales in all major world markets. Increased demand
for airport security and counter-terrorism measures worldwide will fuel future
growth.
www.smithsdetection.com
www.heimannsystems.com
An investor conference call with chief executive Keith Butler-Wheelhouse and
financial director Alan Thomson will take place at 0915hrs UK time, Tuesday 1
October. To hear this broadcast call: + 44 (0)20 8781 0571. A recording of
those proceedings will be available subsequently at www.smiths-group.com.
This information is provided by RNS
The company news service from the London Stock Exchange