Diploma buys Cablecraft for up to £26m

Diploma has acquired Cablecraft for a maximum net consideration of £26m.

The FTSE 250 group, which supplies specialised technical products and services, said the deal would be immediately earnings enhancing and will be reported as part of the Controls Sector activities.

Dunstable-based Cablecraft is a supplier of cable accessory products which are used to identify, connect, secure and protect electrical cables.

According to audited consolidated financial statements for the year ended 31 March 2015, Cablecraft posted pre-tax profit of £3.5m on revenues of £15.4m and the group had gross assets of £11m.

Diploma said the initial net cash consideration to be paid on completion will be £21m, before acquisition costs, which will be met from the group's existing cash resources and revolving bank credit facility.

A deferred consideration of up to £5m will be payable based on earnings before interest and tax achieved in each of the 12 month periods ending 31 March 2016 and 2017.

Chief executive Bruce Thompson said: “The acquisition of Cablecraft is an exciting addition to our Controls Sector. It supplies a range of essential products that are similar to those supplied by the IS-Group but extends substantially both the product range and the industrial end markets served.

The acquisition fits very well with Diploma's strategy of building a larger, broader base of specialised businesses in the Controls Sector. The acquisition also opens up opportunities for cross selling products with Diploma's other Controls Sector businesses."