UK ‘snapping up EU firms’ as £225.5m deal lined up for French industrial heating company

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Spirax-Sarco Engineering has said it is in “exclusive negotiations” with the French private equity firm Qualium to acquire the Vulcanic Group on a cash-and-debt-free basis, subject to closing adjustments and regulatory approvals. Vulcanic was founded in 1973 and is headquartered in Neuilly-sur-Marne, on the outskirts of Paris in the Île-de-France. The firm specialises in the design and manufacture of bespoke electrical heating and cooling solutions for industrial applications, and is Europe’s largest supplier of such systems. The merger is expected to be approved during the third quarter of this year.

Spirax-Sarco Engineering chief executive Nicholas Anderson told Business Live: “We are looking forward to welcoming colleagues from Vulcanic into our group.

“We have been following Vulcanic for some time and believe the acquisition represents an excellent opportunity to broaden our addressable market and further deploy our industry leading technologies in Europe.

“Vulcanic’s existing strength and scale in Europe — with further investment by our group — will provide a fantastic platform for growth.”

This, he added, will be especially true “for our recently launched portfolio of TargetZero solutions, which electrify heat generation for industrial processes to support our customers’ decarbonisation objectives”.

According to Vulcanic, the group employs some 750 people across 11 manufacturing locations and has a 30,000-strong customer base across the globe.

At the end of the last calendar year, Vulcanic reported revenues of €89.4million (£76.8million), earnings before interest, tax, depreciation and amortisation of €17.6million (£15.2million) and earnings before interest and tax of €16.0million (£13.8million) on an adjusted pro-forma basis.

It also recorded gross assets at the time of €222.0million (£186.8million).

An analyst from the financial services company Jeffries told the Times: “The proposed acquisition of Vulcanic looks very sensible to us.

“It has a direct sales model; it looks to be a good strategic fit for the existing electric thermal solutions business.”

Spirax-Sarco Engineering, which is a FTSE 100 firm, said that the acquisition of Vulcanic — and its existing customers, products and infrastructure — would help support the growth of the company’s electrical thermal solutions wing in Europe, the Middle East and Africa.

It is also expected to “complement” the firm’s existing Chromalox electric thermal technology business, which operated primarily in the Americas.

Shares in Spirax-Sarco Engineering — which specialises in pumps, boiler controls and sterilising systems — rose 0.75 per cent to £101.30, giving the firm a valuation of £7.47billion.

The increase will likely be welcome news for the firm, which is reported to be down more than a third this year amid rising costs and disruptions to the supply chain.

The anticipated deal with Vulcanic is expected to boost group earnings this year.

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News of the impending acquisition was well-received one social media.

Commentator Robert Kimbell tied the announcement to Brexit.

He said: “Ever since the 2016 EU referendum in the UK more British companies have been snapping up EU firms.

“This, just the latest example.”

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