Tomkins to Acquire ACD Tridon
1 April 1999
Tomkins to Acquire ACD Tridon
LONDON--April 1, 1999--Tomkins PLC , the international manufacturing company, is pleased to announce it has signed a definitive agreement to acquire ACD Tridon Inc, a wholly owned subsidiary of Devtek Corporation ("Devtek"), a Canadian public company, for an enterprise value of approximately Can$155 million ((pound)63.3 million) in cash.This includes the assumption of ACD Tridon's net debt of approximately Can$100 million ((pound)40.8 million). The acquisition will be financed from Tomkins' existing debt facilities. The transaction is conditional upon regulatory approval and Devtek shareholder approval.
ACD Tridon will be an important addition to Tomkins' Industrial & Automotive Engineering sector. The company is a leading manufacturer of fully integrated windshield wiper systems and is also a producer of hose clamps supplying the automotive industry worldwide. The company has 1,650 employees, with operations covering ten facilities located in the US, UK, Canada, Argentina and Italy.
For the year ended July 31, 1998, ACD Tridon had sales of Can$296.8 million ((pound)121.1 million). Approximately 60 percent of sales are to automotive original equipment manufacturers with the balance to the aftermarket. Close to half of ACD Tridon's sales are to customers in North America with the majority of the balance going to customers in Europe.
Under US Generally Accepted Accounting Principles, ACD Tridon earned operating profit of Can$12.5 million ((pound)5.1 million) in the year to July 31, 1998, adjusted for non-trading and one-off items and before goodwill amortization. As at January 31, 1999, net tangible assets excluding debt were Can$133.7 million ((pound)54.6 million).
Greg Hutchings, Tomkins' Executive Chairman, said: "ACD Tridon is an excellent acquisition for Tomkins and fits very well with our Gates, Stant, Trico and Schrader-Bridgeport operations.
"Our position as a global player in the automotive industry is further enhanced through this transaction which occurs at a time of increasing consolidation among component suppliers. ACD Tridon manufactures products which complement our existing product ranges and brings exciting opportunities to extend our aftermarket distribution around the world.
"This "add-on" acquisition is consistent with Tomkins' strategy to focus on its strategic business activities and to create value for shareholders through enhancing earnings and to generate a return on total investment which will exceed the group's cost of capital within three years."
Currency translations provided for reader convenience at a rate of (pound)1 = Can$2.45
Tomkins comprises a broad range of low-risk technology manufacturing companies. Tomkins' US interests include The Gates Rubber Company, Denver, CO, the world's leading manufacturer of power transmission belts and a major producer of hose and connector products. Other interests include, Murray, Inc., Brentwood, TN, one of the leading US producers of power lawnmowers, snow blowers and bicycles; Red Wing Corporation, Fredonia, NY, the largest US manufacturer of private label grocery products; Smith & Wesson Corporation, Springfield, MA, manufacturer of handguns, handcuffs and the Identi-Kit system; and Tomkins Industries, Dayton, OH, a leading manufacturer of components for residential, commercial, and industrial construction, materials handling and the transportation industry.
Tomkins shares trade in the US in ADR form (each equal to four ordinary shares) on the New York Stock Exchange under the symbol TKS; its ordinary shares are listed on the London Stock Exchange.