4
JULY 2024
SPECTRIS ACQUIRES SCIAPS INCORPORATED
Spectris plc (SXS: LSE), the expert
in providing insight through precision measurement, today announces
that it has agreed to acquire SciAps Incorporated (the Company or
SciAps) for consideration of up to $260 million (£205 million)
comprising up-front consideration of $200 million (£157 million)
plus a deferred element of up to $60[1]
million (£47 million) payable on the delivery of agreed financial
metrics.
Based in Boston,
Massachusetts, SciAps is a high-growth,
specialist provider of handheld instruments leveraging X-ray
Fluorescence (XRF) and Laser Induced Breakdown Spectroscopy (LIBS)
techniques for materials analysis. Its strong culture of
innovation and differentiated handheld technology has enabled it to
develop a strong presence in its market over recent years and an
attractive pipeline of new products.
SciAps instruments identify
compounds, minerals and elements in materials in major industries
and high-growth end markets including those relevant to the
circular economy and energy transition such as: mining; metal recycling; battery materials; rare earth metals;
manufacturing; food; and agriculture.
For year ending 31 December 2024,
SciAps is expected to deliver sales of $70 million (£55 million),
representing an historic 5-year revenue CAGR of over 30%, and
adjusted EBITDA of $12.1 million (£9.5 million). The
combination is expected to conservatively generate synergies of
around $6 million (£4.7 million) which, when applied to the
expected outturn for 2024, represents an EV/EBITDA multiple of c.14
times, with sustained future growth expected to be significantly
ahead of our financial framework of 6-7%, further reducing the
forward multiple.
HIGH GROWTH, HIGH QUALITY BUSINESS WITH COMPELLING STRATEGIC
RATIONALE
The acquisition of SciAps, which
will be integrated into Malvern Panalytical in Spectris Scientific,
is well aligned with the Group's strategy as
follows:
·
Addition of LIBS technology to Malvern
Panalytical's portfolio and access to adjacent hand-held XRF
market;
·
Acquisition of a proven, high-growth business,
with sales growth significantly above the market, reflecting its
leading handheld instrument technology and strong track record of
innovation with an attractive pipeline of new technology and
product introductions;
·
A highly synergistic combination, with SciAps
handheld portfolio used in the field complementing Malvern
Panalytical's range of laboratory and benchtop equipment which,
when combined, will provide a comprehensive suite of technology
offerings in attractive end markets including: green metals/mining;
recycling; batteries; pharmaceuticals; and agriculture;
·
Acceleration of Malvern Panalytical's digital
strategy and solution offering with access to a greater volume and
variety of measurement techniques and input data, allowing Malvern
Panalytical to move analysis 'closer to the sample', while enabling
customers near real-time evaluation and decision making;
and
·
Further enhances Malvern Panalytical's offering in
North America
STRONG FINANCIAL RETURNS CONSISTENT WITH CAPITAL ALLOCATION
FRAMEWORK
At the end of May, Spectris had a
net cash position of £398 million. The acquisition of SciAps
will be funded through cash with the upfront consideration paid on
closing and any deferred element expected to be payable in early
2025.
The acquisition will be accretive to
earnings in the first year of ownership and in line with the
Group's capital allocation policy, with the returns profile
expected to exceed our cost of capital by the end of the third full
year post acquisition. The acquisition is expected to deliver
the following synergies:
·
Cross-selling of SciAps handheld XRF/LIBS
instruments to Malvern Panalytical customers and vice-versa,
particularly in primary materials
·
Ability of both parties to leverage sales channels
and expand their distribution network in key geographies
·
Enhancement of Malvern Panalytical's SMART Return
digital offering leveraging additional handheld
products
The transaction is subject to
customary completion conditions and regulatory approvals, with
completion expected to take place later this year.
Following this transaction, the
Group will remain in a net cash position with further balance sheet
capacity. The Group remains on track to complete its £150
million buy back by the end of the financial year.
Andrew Heath, Chief Executive, said:
"Value enhancing M&A is central to our compounding growth
strategy. SciAps is an excellent business and a great
addition to Spectris Scientific, bringing complementary technology
and strengthening our offering, including our innovative digital
solutions. The acquisition will strengthen Spectris' position
in a number of key end markets benefiting from long-term, secular
and sustainability growth trends, as well as accelerating sales of
SciAps and Malvern Panalytical's offerings through each other's
sales and distribution channels. We look forward to welcoming
the SciAps team and providing our customers with a wider portfolio
of market leading solutions, helping to enhance their processes and
productivity."
Don
Sackett, CEO of SciAps, said:
"We are delighted to be joining the Malvern Panalytical
business under the Spectris Scientific umbrella. We bring to
the portfolio handheld and laser-based (LIBS) elemental analysis,
portable benchtop XRF, with a strong new product pipeline and
plug-in capability to Malvern Panalytical's innovative digital
platform. This is an exciting combination and Spectris is the
perfect partner to maximise the success of our combined
capabilities and technologies for
customers."
Conference call
A conference call for analysts and
investors will be hosted by Andrew Heath, Chief Executive, and
Derek Harding, Chief Financial Officer, at 08.00 BST today to
discuss this statement.
To register for the call please use
the following link:
https://www.netroadshow.com/events/login?show=7380a241&confId=68155
To access the call, please dial +44
(0) 20 3936 2999 - Participant code: 907332.
For and on behalf of Spectris
plc.
LEI number:
213800Z4CO2CZO3M3T10
END
Contacts:
Spectris plc
Mathew Wootton
Investor Relations
Director
+44 7500 078 880
Teneo
Martin Robinson/Giles
Kernick
+44 20 7353 4200
About Spectris
Spectris combines precision with
purpose, delivering progress for a more sustainable world. We
provide critical insights to our customers through premium
precision measurement solutions combined with technical expertise
and deep domain knowledge. Precision is at the heart of what
we do - our leading, high-tech instruments and software equip our
customers to solve some of their greatest challenges to make the
world cleaner, healthier and more productive.
We are focused on two key divisions
- Spectris Scientific and Spectris Dynamics, which are placed
in technology-driven end markets, with strong fundamentals
and attractive growth trajectories. We have leading market
positions in premium segments and employ 7,000 people located in
more than 30 countries, all united behind our purpose to deliver
value beyond measure for all our stakeholders. For more
information, visit www.spectris.com.
About SciAps
SciAps, Inc., is a Boston-based
instrumentation company specializing in portable analytical
instruments to measure any element, any place on the planet. Our
industry-leading X-ray fluorescence (XRF) and laser-based (LIBS)
analyzers are at work across every major industry, including
oil/gas, metals and mining, aerospace, battery and strategic metals
(lithium, rare-earth elements), scrap metal recycling, chemical and
petrochemical, military, forensics and law enforcement. SciAps
instruments are configured to measure elements in all types of
materials, so applications are always expanding, recently including
space research, pandemic anti-viral coatings, agriculture, and
environmental contaminants.