LONDON, UK: Renold Plc, a leading international supplier of industrial chains and related power transmission products, has acquired the trading assets of Davidson Chain PTY (Davidson) for a total cash consideration of AU$6 million.
Davidson was acquired on a cash free, debt free basis, for a total cash consideration of AU$6 million.
The acquisition consideration represents a multiple of approximately 5.9x Davidson’s June LTM EBITDA. There are a number of identified synergy benefits, the effect of which is expected to reduce the multiple to below 5.0x in the short term.
The acquisition is funded from the Group’s existing borrowing facilities. As at 31 March 2023, the Group’s net debt to EBITDA multiple was 0.8x and following completion of the Acquisition remains broadly similar. The Group remains well placed, with sufficient borrowing headroom, to execute on further bolt-on acquisition opportunities from an identified pipeline of targets.
Davidson delivered revenue of AU$4.2 million for the 12 months to June 2023, generating an EBITDA of AU$ 1.1 million.
Commenting on the Acquisition, Robert Purcell, Group Chief Executive of Renold plc, said: “The Davidson acquisition demonstrates further strategic momentum, supplementing organic growth through high quality bolt-on acquisitions which can expand our geographic presence, grow our product offering and strengthen our market position in key end markets.
“We are delighted that Davidson has joined the Renold Group, and believe that not only have we acquired an excellent business, but also retained the services of a very experienced team. The Davidson business is very much aligned with Renold, including an excellent long-established track record of manufacturing and supplying high quality chain products with an entrepreneurial culture that will fit well with our own.
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