LONDON: Strix Group Plc has entered into a conditional agreement to acquire, through its newly incorporated indirect subsidiary, Strix Italy S.r.l., the entire share capital of LAICA S.p.A for an initial consideration of approximately €19.6 million.
The purchase consideration comprises approximately €11.6 million in cash and €8.0 million in Strix ordinary shares, with up to a further €12.0 million payable in cash subject to certain conditions being met, including threshold financial targets for the financial years ending 31 December 2021 and 2022.
LAICA is an Italian company focussed on water purification and the sale of small household appliances for personal health and wellness.
In the 12 months ending 31 December 2019, LAICA generated revenue of €20.4m, Adjusted EBITDA of €2.9m and Adjusted Profit Before Tax of €2.6m. Similarly to Strix, LAICA has shown strong resilience against the adverse headwinds created by the global pandemic and has seen significant demand for its products given its focus on health and wellness markets. Strix expects that LAICA’s strong track record of organic growth and cash generation will continue.
Following completion, the acquisition will expand Strix’s water category, enhance its presence in the health and wellness market and enable Strix to capitalise on the double-digit growth of global sales (in 2019) for both the small domestic appliance and water markets, driven by increased consumer demand.
LAICA has a considerable global presence, an established product range and an advanced new product roadmap. The Acquisition will also provide some consolidation of the water treatment range, driving efficiencies and providing a comprehensive portfolio of products for the Group.
The Acquisition is expected to be up to mid-single digit earnings enhancing, in the first full year of ownership, before the benefit of any synergies.
The acquisition is being funded through a combination of cash and shares, payable to Maurizio and Anna Maria Moretto, who are the current LAICA shareholders. Strix has extended its existing debt facilities in order to satisfy the initial cash consideration and improve the liquidity of the enlarged group. Net debt¹ to Adjusted EBITDA2 is expected to be c.1.4x on completion and is forecasted to reduce to approximately 1.2x by 31 December 2021.
Maurizio Moretto, LAICA’s CEO, will remain with the business until at least March 2023 to continue to execute LAICA’s current growth strategy and drive synergies between Strix and LAICA. Anna Maria Moretto will remain with the business in the short to medium term in order to assist with the orderly handover of day-to-day management.
Mark Bartlett, CEO of Strix Group Plc, commented: “We are very pleased to enter into this agreement to acquire LAICA, which will be our largest acquisition to date. LAICA continues our strategy of growing our small domestic appliance (SDA) and water categories which support Strix’s core competencies. We are acquiring LAICA, which has a long-established track record of supplying high quality products, at a time when it is well-positioned to exploit a range of growth opportunities. We look forward to welcoming the business and all its employees to Strix.”
Isle of Man based Strix, is a global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration.
Strix’s core product range comprises a variety of safety controls for small domestic appliances, primarily kettles. Kettle safety controls require precision engineering and intricate knowledge of material properties in order to repeatedly function correctly. Strix has built up market leading capability and know-how in this field since being founded in 1982.
Strix is admitted to trading on the AIM Market of the London Stock Exchange (AIM: KETL).
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