RNS Number : 8559U

Renold PLC

04 August 2022

4 August 2022

Renold plc

("Renold", the "Company" or the "Group")

Acquisition of Industrias YUK S.A.

Renold, a leading international supplier of industrial chains and related power transmission products, is pleased to announce that it has acquired the entire issued share capital of Industrias YUK S.A. ("YUK"), (the "Acquisition") for a total cash consideration of EUR24 million.


 --   Established in 1964, YUK is a Valencia-based, manufacturer 
       and distributor of high quality conveyor chain ("CVC") and 
       ancillary products. 
 --   YUK's well invested CVC manufacturing facility, based near 
       Valencia, Spain, adds a high quality European based CVC manufacturing 
       capability to Renold's 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. 
 --   Opportunities exist for meaningful manufacturing synergies 
       between YUK and Renold's 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. 
 --   The Acquisition is expected to be immediately enhancing to 
       Group earnings per share, as well as accretive to the Group's 
       operating margin. 
 --   ROIC is expected to be in line with management's targets. 

The Acquisition and Financial Considerations

YUK is being acquired, subject to normal completion accounts adjustments, on a cash free, debt free basis, and will consist of an initial cash consideration of EUR20.0 million, followed by two further cash payments of EUR2.0 million each, payable 12 months and 24 months from the date of completion of the Acquisition.

The total consideration for the Acquisition of EUR24.0 million represents an acquisition multiple of c. 7.6x June 2022 LTM EBITDA. Identified cost synergies will reduce the multiple comfortably below 7.0x, with additional benefits to be expected through commercial collaboration.

The Acquisition will be funded utilising the Group's existing borrowing facilities. As at 31 March 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.

YUK delivered revenue of EUR18.6m for the 12 month period ended June 2022, generating an EBITDA of EUR3.1m million.

Commenting on the Acquisition, Robert Purcell, Group Chief Executive of Renold plc, 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.

"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."

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014), as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.


 Renold plc                            IFC Advisory Limited 
 Robert Purcell, Chief Executive       Tim Metcalfe 
 Jim Haughey, Group Finance Director   Graham Herring 
 0161 498 4500                         020 3934 6630 
 Nominated Adviser and Joint           Joint Broker 
 Peel Hunt LLP                         FinnCap Limited 
 Mike Bell                             Ed Frisby / Tim Harper (Corporate 
 Ed Allsopp                            Andrew Burdis / Harriet Ward 
 020 7418 8900                         020 7220 0500 


Renold is a global leader in the manufacture of industrial chains and also manufactures a range of torque transmission products which are sold throughout the world to a broad range of original equipment manufacturers and distributors. The Company has a well-deserved reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, steel and mining.

Further information about Renold can be found on the website at: www.renold.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.



(END) Dow Jones Newswires

August 04, 2022 02:00 ET (06:00 GMT)

Renold (LSE:RNO)
Gráfica de Acción Histórica
De Ene 2023 a Feb 2023 Haga Click aquí para más Gráficas Renold.
Renold (LSE:RNO)
Gráfica de Acción Histórica
De Feb 2022 a Feb 2023 Haga Click aquí para más Gráficas Renold.