Bodycote, a heat treatment services company, has announced it will acquire Ellison Surface Technologies to strengthen its thermal spray and engineered coating surface technology services, the company said.
Ellison´s business, based in North America, is highly complementary to Bodycote´s existing Surface Technology business. It is primarily focused on the aerospace market. It will be integrated into Bodycote´s surface technology and aerospace business, which itself has seen strong structural growth in recent years.
Gross consideration for the acquisition will be USD 200 million (GBP 154m). When adjusted for tax benefits worth at least GBP 30m, net consideration for the transaction is approximately GBP 170 million. The consideration will be settled using Bodycote´s existing committed credit facilities.
Ellison´s business generated revenues of USD 50million in 2018, with associated pro-forma EBITDA of USD 8 million. Based on results year to date, it is anticipated that Ellison´s revenue for 2019 will be USD 58 million with pro-forma EBITDA of USD 12million. This expected revenue growth of 16%, and its associated 50% increase in pro-forma EBITDA, reflects the fact that Ellison has been successfully gaining share in the civil aviation business, which will also provide a solid foundation for further revenue and profit growth in future years. It is anticipated that the Ellison business will be immediately earnings enhancing to the enlarged Bodycote business. Ellison employs almost 400 people across six sites located across the United States, Canada and Mexico.