Mpac Group PLC Acquisition of Lambert and Trading Update (6484X)
May 01 2019 - 2:00AM
UK Regulatory
TIDMMPAC
RNS Number : 6484X
Mpac Group PLC
01 May 2019
1 May 2019
Mpac Group plc
("Mpac" or the "Company")
Acquisition of Lambert Automation Limited and Trading Update
Mpac Group plc (AIM: MPAC), the global packaging solutions
group, is pleased to announce that it has acquired the entire
issued share capital of Lambert Automation Limited ("Lambert") for
an initial consideration of GBP15.0 million to be paid in cash (the
"Acquisition"). Further deferred and earn-out consideration may
become payable as set out below.
Lambert was founded in 1973 and is a provider of technology
leading automation solutions to the medical and consumer healthcare
markets. Lambert is based in Tadcaster, UK and employs
approximately 160 staff. The audited financial statements of
Lambert for the year to 31 December 2018 showed revenue of GBP17.9m
and profit before tax of GBP1.3m including depreciation and
amortisation of GBP0.8m and an interest credit of GBP1.1m,
including waived preference share interest. Audited net assets at
the same date were GBP7.1m, including net cash of GBP2.3m and
goodwill of GBP4.9m.
Sales and earnings before interest, tax, depreciation and
amortisation ("EBITDA") for the previous three financial years were
as follows:
For the year ended 31 2016 2017 2018
December
---------------------- --------- --------- ---------
Sales GBP22.7m GBP21.2m GBP17.9m
EBITDA GBP2.1m GBP2.2m GBP1.0m
Lambert recorded order intake of GBP24.5m in 2018, entering 2019
with a significantly higher order book than the previous year,
providing confidence in its expected out-turn for the current
financial year.
Background to the Acquisition
The Acquisition represents a compelling fit with Mpac's
strategic intent of being a market leader in the provision of
full-line packaging solutions for the pharmaceutical, healthcare
and food and beverage sectors. Lambert typically works upstream in
its customers' product and production lifecycle which will enable
Mpac to offer a more comprehensive and broader range of automation
and packaging solutions to its customers. Mpac will enter the
medical and healthcare product assembly and packaging market
fulfilling the expected increase in demand for wellness products.
Mpac will support Lambert's current strategic plan, exploring the
growth opportunities opened by the access to its customer base and
global business network.
Transaction Highlights
Mpac has acquired the entire issued share capital of Lambert for
an initial consideration of GBP15.0 million, on a cash-free,
debt-free basis, to be paid in cash, subject to customary
adjustments for working capital. In addition, earn-out
consideration will be paid on the basis of a multiple of five times
the extent to which the average annual EBITDA of Lambert for the
three years ending 31 December 2021 exceeds GBP2.5 million. The
earn-out consideration is capped at a maximum of GBP2.5 million and
will be paid in cash.
It is expected that the Acquisition will be immediately
materially earnings enhancing.
It is intended that three of the existing shareholders,
including Warren Limbert, Managing Director, will remain with
Lambert for at least the next three years. The acquisition of
Lambert is expected to deliver sales synergies through
cross-selling with the existing Mpac business and access to its
global sales and service infrastructure. In addition, cost
synergies are expected including through access to Lambert's
well-developed supply chain capabilities.
Tony Steels, Chief Executive of Mpac, commented:
"Lambert is a high-quality business with proven performance and
long-standing embedded relationships with global blue-chip
customers. Clear synergies exist in the market, technologies and
supply chain which will provide our customers and potential new
customers even greater confidence in the delivery of complete
turn-key packaging solutions. Lambert entered 2019 with a
significantly higher order book than the previous year and I am
excited about the potential of the combined business and the
momentum it brings to the fulfilment of our strategic plans."
Trading update
Ahead of the AGM, Mpac Group plc a global leader in 'Make, Pack,
Monitor and Service' high speed packaging solutions is pleased to
announce the following trading update:
Trading performance of the existing business in the current
financial year is in line with the Board's and market expectations.
Order and quote activity remain strong and the current order book
is significantly above the previous year. Additionally, further
progress has been made in 2019 to secure the benefits from the
delivery of our One Mpac business model and the long-term strategic
priorities of, 'Going for Growth', 'Making Service a Business' and
delivering improved 'Operational Efficiencies'.
Tony Steels, Chief Executive, commented:
"I am pleased to report good progress in the trading performance
for 2019, of the existing business, supported by growth in order
intake and sales over the prior year in both equipment and services
backed by a strong orderbook, good levels of quote activity and
prospects. The Group has continued the momentum from the second
half of 2018 into the start of 2019 and I am confident that we will
be able to deliver results for the full year in line with
expectation."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014
For further information, please contact:
Mpac Group plc Tel: +44 (0) 2476 421100
Tony Steels, Chief Executive
Will Wilkins, Group Finance Director
Panmure Gordon (UK) Limited (Nominated Advisor & Broker) Tel: +44 (0) 20 7886 2500
Dominic Morley
James Stearns
Hudson Sandler Tel: +44 (0) 20 7796 4133
Nick Lyon
Nick Moore
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END
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