USA / BR - Vesuvius Technical services acquisitions in Brazil and the USA

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Vesuvius, a global leader in molten metal engineering, is pleased to announce the signing of binding agreements for the acquisition of two businesses, Ecil Met Tec and Process Metrix, in pursuit of the strategy to build a presence as a leading technical services provider to the steel and foundry industries. The total consideration for these acquisitions will be approximately £30 million, and it is expected that both will complete during 2014. Both companies are profitable, and the acquisitions are expected to be earnings enhancing in 2015. However neither acquisition is expected to make a meaningful contribution to the 2014 earnings of Vesuvius. The management of both companies will remain with Vesuvius.
François Wanecq, Chief Executive of Vesuvius, said:
“I am delighted to announce the first acquisitions we have made since our demerger in 2012. At the point of demerger we pledged to reshape the portfolio, improve margins, deliver superior returns to shareholders, and deliver growth in part by pursuing our strategy of providing technical services to the steel and foundry industries. To date, we have disposed of non-core activities in precious metals, construction and brick manufacturing, improved margins by 174 basis points, increased the dividend, and returned capital through a share buyback.

“In addition to improving our base business, we are now turning our attention to building our technical services presence, and it is particularly pleasing to have added two high technology businesses with strong management teams and well-established track records of delivering superior service to their customers. I am confident that Vesuvius’ global presence and expertise will allow us to expand the accessible market for Ecil Met Tec and Process Metrix products and services.

“These acquisitions are a further demonstration of delivering on the strategy set out at the time of demerger to expand our offering to customers through the supply of data that contributes to significant improvements in the quality and productivity of their processes and products. We will continue to improve the quality of our earnings by targeting further margin improvement, reviewing the portfolio, and adding to our technical services offering in line with our stated strategy.”
About Ecil Met Tec
Ecil Met Tec is a manufacturer and supplier of consumable thermocouples used to measure, amongst other things, the temperature of molten metal in the steel making process. With operations in Piedade, near Sao Paulo in Brazil, and Cleveland, USA, Ecil Met Tec has 550 staff. The total consideration is up to BRL86 million on a cash free debt free basis, with the majority payable on completion which is anticipated to occur towards the end of the year.
About Process Metrix
Process Metrix, based in Pleasanton, Northern California, is a supplier of laser units used to measure refractory wear in vessels used in the steel making process. The total consideration is US$10 million on a cash free debt free basis. Of this, US$6 million is payable on completion, which is expected by the end of September 2014, with the remainder payable over a 5 year period subject to the achievement of certain pre agreed targets.
For further information please contact:
Shareholder/analyst enquiries:
Vesuvius plc
François Wanecq Chief Executive
+44 (0) 207 822 0000
Chris O’Shea Chief Financial Officer
+44 (0) 207 822 0000
Tony Harrison Group Head of Corporate Finance
+44 (0) 207 822 0000
Media enquiries:
MHP Communications
John Olsen/Vicky Watkins
+44 (0) 203 128 8100