IMI completes £120m acquisition of German firm

BIRMINGHAM engineering group IMI has completed its £120m acquisition of German control valve business, Bopp & Reuther.

IMI, which announced the deal in November, said the acquisition would strengthen its power division.

Bopp & Reuther is closely aligned with IMI’s Critical Engineering business CCI and the transaction is expected to deliver synergies of approximately £7m (€9m) by the end of 2017.  
 
In the calendar year 2013, Bopp & Reuther’s revenues were £71.1m (€90m) and EBITDA was £8.85m (€11.2m) with an improved performance expected in 2014.
 
In addition to the synergies, IMI said the transaction would significantly enhance its presence in the growing power sector and extend the Critical Engineering division’s existing product range to include complementary semi-severe valve products and technologies which will expand the division’s current market.

It is also forecast to increase exposure to the emerging markets in particular China and India where the power markets are forecast to grow 5% to 7% per annum over the next five years.

The group is also expected to take advantage of new higher margin aftermarket opportunities from Bopp & Reuther’s existing installed base.

The acquisition is expected to be earnings accretive in 2015 and return on invested capital is expected to exceed the group’s weighted average cost of capital by the end of 2017.

IMI chief executive Mark Selway said at the time the deal was announced that the Critical Engineering division was in line for fresh growth.

“This acquisition provides a meaningful addition to our capabilities,” he said. “It gives us critical mass in the power sector particularly in the faster growing geographies of China and India. It also expands our product portfolio, enabling us to offer customers complete valve packages and Bopp & Reuther’s existing installed base gives us access to a bigger aftermarket opportunity.”

Bopp & Reuther specialises in the design and manufacture of control and safety valves for the power generation industry.  Its product portfolio includes both configured and semi-severe valve technologies and in recent years it has extended its geographic reach and has a large customer base across China, India and Korea.