IMI strengthens engineering arm with £150m US acquisition
Fluid control group, IMI has strengthened its Precision Engineering division with the £148m acquisition of a US manufacturer.
The Birmingham-based group has acquired Bimba, a market leading manufacturer of pneumatic, hydraulic and electric motion solutions.
The Chicago-based company has an extensive distributor network principally servicing the North American Industrial Automation market.
IMI has described the deal as a “significant strategic step for the division” and one which will nearly double the size of IMI Precision Engineering’s US Industrial Automation business.
The plan now is to progressively move Bimba margins closer to those of IMI Precision Engineering.
The transaction is expected to be earnings enhancing in the first full year of ownership with return on capital exceeding IMI’s costs within the first three years.
“The transaction is fully aligned with IMI’s strategy and fulfils its stated objective of increasing its US revenues while extending IMI Precision Engineering’s presence in its core Industrial Automation segment,” said IMI.
“In particular, the acquisition provides the platform to accelerate IMI Precision Engineering’s North American growth objectives by leveraging both Bimba’s strong brand and its market leading US distributor network.
“The combination will also materially improve Bimba’s profitability with margins expected to progressively move closer to those of IMI Precision Engineering as it adopts IMI’s operational excellence programme.”
The acquisition is being funded in cash on completion from existing bank facilities. In addition, IMI has set aside $2.5m for staff retention.
Completion, subject to clearance and approval by Bimba’s employee stock ownership plan, is expected in early 2018.
Founded in 1957, Bimba manufactures an advanced range of actuators and associated products primarily for the Industrial Automation market. It has a blue-chip client base, extensive distributor relationships and a significant installed base.
The company operates from nine locations, seven in the US, one in Mexico and has a sales office in the Netherlands.
For the year ending December 2016 Bimba generated revenues of $109m with adjusted EBITDA of $13.3m. For 2017, it is on course to achieve revenues of c.$120m and adjusted EBITDA of c.$16m.
Commenting on the acquisition Mark Selway, chief executive of IMI, said: “Bimba will significantly enhance IMI Precision Engineering’s current position in the US Industrial Automation market. The enlarged product portfolio will increase our competitiveness and Bimba’s extensive distributor network will materially improve IMI Precision Engineering’s US market access.”
Back in the UK, IMI has also announced that the former head of Jaguar Land Rover’s parent company, Tata Motors, has been appointed as its new senior independent director.
Carl Peter-Forster assumes the role following the death of former SID, Bob Stack.
Fulfilling Mr Stack’s role as chair of the group’s remuneration committee is Birgit Nørgaard.
Mr Forster and Ms Nørgaard have been non-executive IMI directors since 2012 and both are established members of its audit, nominations and remuneration committees.
Commenting on these changes, Lord Smith of Kelvin, chairman of IMI, said: “Our succession planning and board evaluation processes have enabled us to make two excellent appointments from our existing non-executive team and I wish Birgit and Carl-Peter every success in their new roles.”
