Essentra buys Wixroyd Group for £29.5m

Components maker Essentra said it had bought Wixroyd Group, a UK supplier of industrial parts for the engineering sector, for an initial £29.5m with a further £7m potentially payable on a deferred earn-out basis.

The deal is the first acquisition to be announced since Essentra outlined its new strategy as a pure-play components business. Essentra said Wixroyd Group expands its capabilities in hardware components and creates “significant” additional cross-selling opportunities across a range of current end markets with the initial focus on its customer base in Continental Europe.

Essentra said it expected the acquisition to be accretive to adjusted earnings in the first full year of ownership, with return on invested capital forecast to exceed 15% within three years, and deliver profit margins significantly ahead of the current group level.

Based in Chichester, the Wixroyd Group comprises three UK brands of differentiated mechanical components supplying 9,000 customers. For the year ended December 31, 2021, Wixroyd generated revenue of £10.4m, and EBITDA of £2.6m.

The initial purchase price and any subsequent conditional consideration will be financed from Essentra's existing cash flow and debt facilities.

Reporting by Frank Prenesti for Sharecast.com