acquisition of the bimba manufacturing company · imi plc | acquisition of the bimba manufacturing...
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Acquisition of the Bimba Manufacturing Company
IMI plc | Analyst Pack
An excellent strategic fit▶ The deal is perfectly aligned with IMI’s strategic ambitions
▶ Increases IMI Group’s US revenue percentage from 20% to 23%1
▶ Consistent with the ambition to expand in Industrial Automation▶ Timing ideally suits Precision Engineering plans and capabilities
▶ The acquisition significantly enhances IMI Precision Engineering’s position in the US Industrial Automation market
▶ Doubles the size of Precision Engineering’s US Industrial Automation business▶ Opens access to market-leading distribution network in the US▶ Adds breadth and depth to product offering in existing markets and sectors
▶ It makes financial sense▶ US$198m consideration represents adj. EBITDA multiple of 12.4x▶ Earnings enhancing in the first full year of ownership▶ Returns in excess of IMI’s cost of capital within three years▶ Clear pathway towards IMI Precision Engineering margins▶ Pro forma net debt to EBITDA post acquisition at 1.3x
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2Note 1: 2016 pro-forma combined sales converted at 1£:US$1.34 FX rate.
IMI plc | Acquisition of the Bimba Manufacturing Company
Bimba Manufacturing Company overview
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2010 2011 2012 2013 2014 2015 2016 2017E
Sales by product Sales by vertical Sales by channel
Source: Bimba historical sales information for total sales; 2017 estimates sales split by product, vertical and channel.3
IMI plc | Acquisition of the Bimba Manufacturing Company
▶ $120m leading North American manufacturer of advanced pneumatic products for Industrial Automation
▶ Based in Chicago, Illinois with locations in the USA (7), Mexico (1) and the Netherlands (1); plus a market-leading network of distributors
▶ 75% actuators, 14% controls, 1% air preparation, 3% safety & production and 7% other products
▶ Blue-chip customer base▶ ~500 permanent employees
Sales ($m)
93%
7%Industrial Automation
Life Sciences
85%
1%5%
10%Distribution
E-commerce
Private label
Direct
75%
14%
11%
Actuators
Controls
Associated Products
► Market leading distributor network► Excellent customer reputation and
relationship► Long established installed base
WORLD-CLASS CAPABILITY
▶ IMI operating systems▶ Lean processes▶ Global sourcing▶ Engineering excellence
► Actuators (pneumatic, electric, hydraulic)► Valves► Sensors & switches► Vacuum► Standard FRLs
STRONG U.S. PRESENCE
LEADING PRODUCTS
Bimba + IMI Precision Engineering – WIN:WIN
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IMI plc | Acquisition of the Bimba Manufacturing Company
Enhanced capabilities & investment to improve performance
Expanded product range and distributor network
to drive revenues
GLOBAL PRESENCE
COMPLIMENTARY PRODUCTS
Electric actuators
Pinch Valves
FRLs
Pneumatic actuators
Vacuum productsInline Solenoid Valves
Valve Islands
IMI plc | Acquisition of the Bimba Manufacturing Company
Integration milestones & objectives
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Implement Commercial
Strategy
Blueprint for the Future
Implement IMI Best Practice
Execute Operational
Improvement
Projects Deliverables
▶ Build plans to deliver synergy potential and provide the foundation for accelerated growth of the combined Precision Engineering and Bimba businesses
▶ Prioritise the implementation of IMI systems, procedures and practices to avoid unnecessary disruption
▶ Phase I: ‘Fit for Growth’▶ Phase II: Manufacturing
Excellence Plan IMI Precision USA
▶ First priority will be to present a unified approach to the market
2018 TimelineJan Mar DecJun Sep
IMI plc | Acquisition of the Bimba Manufacturing Company
An excellent strategic fit
Transforms IMI Precision Engineering’s position in the US Industrial Automation market
Opens access to market-leading distributor network in the US
Extends product portfolio and customer offering with mimimal overlap
Creates cross-selling opportunities across an enlarged customer base
Brings IMI processes and disciplines to BIMBA
Clear pathway to improved margins at Bimba
Earnings enhancing and returns in excess of cost of capital
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Transaction details▶ Purchase consideration US$198m
▶ Cash-free, debt-free after expenses▶ Estimated 2017 adjusted EBITDA multiple of 12.4x▶ Funded through existing bank facilities
▶ Cash consideration still leaves strong balance sheet▶ Estimated pro forma Net Debt/EBITDA @1.3x
▶ Transaction conditions▶ Merger clearance▶ Bimba ESOP shareholder approval▶ Completion expected end-January 2018
▶ Investment returns▶ Earnings enhancing in the first full year of ownership▶ Returns in excess of IMI’s cost of capital within three years▶ Clear pathway towards IMI Precision Engineering margins 7
IMI plc | Acquisition of the Bimba Manufacturing Company
Financials
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$m FY 2015 Act FY 2016 Act FY 2017(E)Net sales 109.4 109.3 120.0
EBITDA1 13.9 13.3 16.0
EBITDA margin 12.7% 12.2% 13.3%
EBITA1 9.4 8.4 10.7
EBITA margin 8.6% 7.7% 8.9%
Note 1: Adjusted EBITDA for excess ESOP contributions, ESOP administration expenses and other non-recurring items. EBITDA and EBITA includes additional pro-forma US$1.5m for operational resources.
IMI plc | Acquisition of the Bimba Manufacturing Company
