Hexatronic signs an agreement to acquire Fibron from Rubicon
Partners and strengthens its position in Harsh Environments
Press release June 28, 2023Gothenburg, Sweden
Hexatronic signs
an agreement to acquire
Fibron from Rubicon Partners
and strengthens its position in Harsh
Environments
Hexatronic Group AB (publ) (“Hexatronic”) has signed an
agreement to acquire Fibron BX, LTD (“Fibron”), a leading original
equipment manufacturer within harsh environment electro-optical
cables from Rubicon Partners. By acquiring Fibron, Hexatronic will
strengthen its position as a comprehensive provider of high-quality
umbilical products and specialty underwater cables. Fibron's
diverse portfolio delivers across sectors such as traditional
energy markets including renewables (wave, tidal & wind), ROV,
defense, and diving and their extensive global customer base
complements Hexatronic's existing portfolio. The estimated
enterprise value amounts to GBP 32 million.
Strategic rationale
This strategic acquisition allows for additional diversification
of Hexatronic’s business and increased opportunities within Harsh
Environment markets. Following the completion of the acquisition,
Hexatronic’s Harsh Environment business will increase from
approximately 7 percent of annual group sales to over 11 percent,
on a proforma basis. Hexatronic sees promising opportunities for
further growth in the harsh environment sector, both through
organic expansion and future acquisitions.
The agreement presents numerous synergies with Hexatronic
Rochester Cable, the Hexatronic subsidiary within Harsh
Environments, including complementary production capabilities,
improved utilization, expanded tender bidding ability, and enhanced
economies of scale. Additionally, Fibron's expertise in custom
umbilical cables, along with their proficiency in global project
sales, adds significant value to Hexatronic's capabilities.
Comments from Hexatronic CEO
“The acquisition of Fibron marks a significant milestone for
Hexatronic as we expand our portfolio and strengthen our operations
in Harsh Environments. Fibron's expertise and reputation as a
leading manufacturer of subsea control umbilicals align with our
strategic growth objectives. Together, we will combine our
strengths and capabilities to provide enhanced solutions and value
to our customers. We look forward to welcoming the Fibron team into
the Hexatronic Group and embarking on this exciting journey of
growth and innovation”, says Henrik Larsson Lyon, CEO of Hexatronic
Group.
Comments from Fibron
CEO
"Fibron’s business provides products globally into the harshest
of underwater environments, becoming part of Hexatronic group
represents stability for our growing business as we continue to
deliver for our customers and employees. We are excited about the
opportunity of working closely with Hexatronic Rochester Cable,
together we are globally complementary and will be able to offer a
wider product portfolio to our existing customer base”, says Phil
Ashley, CEO of Fibron.
Overview of the transaction
The purchase price corresponds to a fixed enterprise value of
GBP 25 million, with a potential earn-out of up to GBP 7 million
based on Fibron’s accumulated EBITDA for the full year of 2023.
EBITDA for the current year is expected to be GBP 5.3 million,
which will result in full earnout and a purchase price of GBP 32
million. This corresponds to a transaction multiple of 6.0x based
on expected EBITDA for the current year and 7.4x based on EBITDA
for the full year of 2022.
The proposed acquisition will be fully financed through existing
credit facilities from Danske bank and SEB. After completion of the
transaction, Hexatronic’s proforma net debt is expected to amount
to 1.5 times proforma EBITDA. Proforma net debt including lease
liabilities is expected to amount to 1.8 times proforma EBITDA.
Hexatronic acquires Fibron from Rubicon Partners, which is a
UK-based private equity fund, established in 1993, that is focused
on investing in complex industrial businesses. Rubicon acquired
Fibron in 2018 as a carve-out from its US-corporate owner, Actuant
Corporation. Under Rubicon’s ownership, Fibron has doubled in size
through a strategic focus on supplying dynamic umbilicals to harsh
environments, including through growing in new segments such as ROV
and Renewables.
The existing Fibron management team will remain in their current
roles.
The transaction is subject to customary closing conditions and
regulatory approval under the National Security and Investment Act.
The deal is expected to be completed in the latter part of the
third quarter 2023.
The acquisition has no significant impact on Hexatronic’s
earnings.
AdvisorsAlvarez & Marsal is serving as
financial due diligence advisor to Hexatronic, White & Case is
serving as legal counsel in connection with the transaction.
Rubicon Partners were advised by KPMG (sell-side M&A) and
Proskauer (legal).
Gothenburg, June 28, 2023
Henrik Larsson LyonCEO Hexatronic Group
For more information, please
contact:Henrik Larsson Lyon, CEO
Hexatronic Group, +46 706 50 34 00Pernilla Lindén, CFO
Hexatronic Group, +46 708 77 58 32
The information was submitted for publication, through the
agency of the contact person set out above, at 12:00 CEST on 28
June 2023. This is a translation of the Swedish version of the
press release. When in doubt, the Swedish wording prevails.
About Hexatronic
Hexatronic creates sustainable networks all over the world. We
partner with customers on four continents – from telecom operators
to network owners – and offer leading, high-quality fiber
technology for every conceivable application. Hexatronic Group
(publ.) was founded in Sweden in 1993 and the Group is listed on
Nasdaq OMX Stockholm. Our global brands include Viper, Stingray,
Raptor, InOne, and Wistom®.
About Fibron
Fibron is a renowned global manufacturer, that specializes in
umbilical cables and other subsea specialty cables primarily
utilized by offshore oil and gas, renewables, ROV, defense, and
diving sectors. The company has considerable in-house design
expertise and manufacturing facilities capable of producing a broad
range of products. Fibron’s track record ensures the provision of
cable or umbilical solutions for most situations, and expertise and
experience in this field of operation. The company currently has
114 employees and is based out of Hoddesdon, North of London, UK.
It also operates a ~7,200 square meter production facility in the
region. The company reported an EBITDA of GBP 4.3 million for the
full year of 2022.
About Rubicon Partners
Rubicon Partners is a hands-on investment partnership focused on
the acquisition of industrial businesses in the UK. Over the past
30 years, Rubicon has invested in 79 businesses across the
manufacturing, distribution and service sectors, ranging in value
from GBP 15 to 250 million. Rubicon focuses on opportunities for
long-term value creation through working closely with company
management in addressing strategic opportunities and operational
performance. The firm has extensive experience in acquiring from
private family ownership, retiring owner managers, and corporate
carve outs. The hallmark of the Rubicon approach is certainty of
execution and long-term investment strategy.
- 2023-06-28 Hexatronic signs an agreement to acquire Fibron from
Rubicon Partners and strengthens its position in Harsh
Environments
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