Diploma buys in-vitro diagnostics products supplier

Technical products supplier Diploma has bought Abacus ALS, the largest privately owned supplier of in-vitro diagnostics products in Australia and New Zealand, for up to £15.7m (AU$26m).

The acquisition is expected to be immediately earnings enhancing and is part of the company's strategy to expand its healthcare business.

Diploma paid £13.6m (AU$22.5m) up front from its existing cash resources and revolving bank credit facility.

It will pay a maximum of £2.1m (AU$3.5m) later this year depending on the operating profit out-turn of Abacus for the financial year ending 30 June.

Abacus generated revenue of about £13.6m (AU$22.6m) in the year ended 30 June 2016 and pre-tax profit of about £1.5m (AU$2.5m), after charging losses of discontinued businesses and other non-recurring expenses.

While, underlying operating profit was about £1.8m (AU$3m) and audited gross assets were £5.6m (AU$9.2m).

Diploma chief executive Bruce Thompson said: "This acquisition fits well with Diploma's strategy of building a larger, broader based healthcare business with core strengths in clinical diagnostics and surgical products.

“Abacus has a good fit with our existing healthcare businesses in Australia and New Zealand and opens up further growth opportunities."