Chains manufacturer announces €24m acquisition of Spanish business
Renold, the Manchester-based industrial chains manufacturer, announced the €24m acquisition of a Spanish chains business today.
YUK SA, a manufacturer and distributor of high quality conveyor chain and ancillary products, was established in 1964 and is based in Valencia.
Renold said it adds high quality European-based CVC manufacturing capability to its current transmission (TRC) and tooth chain manufacturing capability in Europe.
The acquisition substantially increases the group’s access to the Iberian chain market, where historically it has been under represented.
And Renold said opportunities exist for meaningful manufacturing synergies between YUK and its current international operations.
The acquisition will allow Renold to leverage YUK’s strong CVC market position in Spain and Portugal to expand sales of the group’s existing range of premium European TRC products, and enable sales of YUK products throughout Renold’s extensive European sales network, beyond Iberia.
The YUK management team, which brings many years of industry and market knowledge, will transfer to the group on completion of the acquisition, and continue to lead YUK, joining Renold’s European management team.
Renold said the acquisition is expected to be immediately enhancing to group earnings per share, as well as accretive to the group’s operating margin.
The acquisition comprises €20m in cash, followed by two further cash payments of €2m each, payable 12 months and 24 months from the date of completion of the acquisition.
It will be funded from Renold’s existing borrowing facilities.
As at March 31, 2022, the group’s net debt to EBITDA multiple was 0.6x and, following completion of the acquisition, is expected to remain below 1.5x. This allows the group to retain sufficient headroom to execute on an identified pipeline of further bolt-on opportunities, it said.
YUK delivered revenue of €18.6m for the 12 month period ended June 2022, generating an EBITDA of €3.1m.
Renold chief executive, Robert Purcell, said: “We are delighted that YUK is to join the Renold Group and that not only are we buying an excellent business, but also retaining the services of a very talented group of managers and employees.
“The acquisition of YUK considerably expands and strengthens our European conveyor chain offering, while also allowing us to grow within the Iberian market. YUK has a long established track record of manufacturing and supplying high quality chain products which fit well with our own premium product offering.”
He added: “The acquisition is expected to be earnings enhancing from year one and gives rise to considerable business synergies. We are delighted to welcome the YUK team as part of the Renold family of companies.”
