Melksham, UK – Avon Rubber is selling its milkrite | InterPuls business to DeLaval Holding BV for £180 million (€200 million) on a cash and debt-free basis, the companies have announced.
Subject to closing conditions and regulatory approvals, the deal is expected to be completed in the first quarter of our 2021 financial year (ending 30 Sept), said Avon Rubber’s 2 July press release.
The business, which supplies ‘milking point solutions’ to dairy farmers worldwide has been growing and profitable over many years, according to Avon Rubber.
For the fiscal year ended 30 Sept 2019, milkrite | InterPuls generated sales of £50.9 million, adjusted EBITDA of £10.5 million and ‘statutory operating profit of £3.8 million.
The business is led by managing director Craig Sage and Andrew Porter, finance director who are to transfer to DeLaval, along with all other of its employees.
The milkrite | InterPuls unit has been an important part of the group over many years, according to Paul McDonald, chief executive officer of Avon Rubber.
“However, having achieved our valuation expectations, the board believes the time is right to allow this business to grow and flourish under new ownership,” said McDonald.
With around 4,500 employees and part of Tetra Laval Group, Stockholm-based DeLaval is a world-wide suppliers of milking equipment
In a statement, DeLaval president & CEO Joakim Rosengren described milkrite | InterPuls as “a very successful company with a strong brand and trademark portfolio acknowledged by dairy farmers across the world.”
The acquired business, added Rosengren, will operate as a stand-alone company within the DeLaval organisation
After the sale, the UK group will be solely focused on its Avon Protection business, a global supplier of respiratory and ballistic protection in military and first responder markets.
Sale proceeds, stated McDonald, will “provide further funding capacity, enabling us to take advantage of acquisition opportunities… and enhance our capabilities within our target markets.”
After tax and transaction costs, the UK rubber-based products supplier expects to receive net proceeds before customary adjustments of around £160 million.
Under an agreement with trustees of its UK pension scheme, Avon Rubber said it will make a one-time contribution of £20 million to strengthen the scheme’s funding after sale-completion.