Avon Rubber p.l.c. announced in July that it had signed an agreement to sell milkrite | InterPuls to DeLaval Holding BV, the Netherlands-based global leader in milking equipment for dairy farmers, for a cash consideration of £180 million ($231.88 million) on a cash and debt free basis. The consideration is payable at completion and subject to customary adjustments to this announcement, the British specialist in respiratory protection equipment for military, law enforcement and fire personnel as well as dairy milking equipment says that DeLaval Holding BV is now in receipt of the competition clearance approvals required to acquire milkrite | InterPuls. Following receipt of these approvals the divestment is expected to complete on September 25, 2020.
Avon Rubber says that post-tax and transaction costs, it expects to receive net proceeds before customary adjustments of circa £160 million ($206.10 million. The group has agreed with the trustees of its U.K. pension scheme to make a one-time contribution of £20 million ($25.76 million) to strengthen the scheme’s funding position following the completion of the deal. The remaining proceeds will be used to strengthen Avon Rubber’s balance sheet, as it continues to “target value enhancing acquisitions to support the growth of its Avon Protection business.”
milkrite | InterPuls is a global leader in providing complete milking point solutions to dairy farmers across the world and has been a growing and profitable business for Avon Rubber over many years. In the financial year ending 30 September 2019, milkrite | InterPuls generated revenue of £50.9 million ($65.5 million), Adjusted EBITDA of £10.5 million ($13.5 million) and Statutory Operating Profit of £3.8 million ($4.89 million). As at 31 March 2020, the book value of the gross assets subject to the transaction amounted to £50.1 million ($64.5 million).
milkrite | InterPuls is led by the Managing Director, Mr.Craig Sage, and Finance Director, Mr. Andrew Porter, who will be transferring to DeLaval, along with all other milkrite | InterPuls employees.
Avon Rubber says that milkrite | InterPuls will be treated as a discontinuing operation in their 2020 financial statements. As such, the results of milkrite | InterPuls up to the date of disposal will therefore be reported as a single line item in the consolidated statement of comprehensive income, with the 2019 comparators restated on the same basis.
Commenting on the divestment, Avon Rubber CEO Mr.Paul McDonald, Chief Executive Officer, said the transaction represents an important step in the strategic development of Avon Rubber. “milkrite | InterPuls has been an important part of the Group over many years. However, having achieved our valuation expectations, the Board believes the time is right to allow this business to grow and flourish under new ownership,” he said, wishing the milkrite | InterPuls team the very best for the future.
Following completion of the sale, Avon Rubber said it plans to focus solely on its Avon Protection business, which is recognised as a global leader in respiratory and ballistic protection in Military and First Responder markets. The proceeds of the transaction will provide further funding capacity, letting the company seek out acquisition opportunities which meet its specific criteria and can enhance its capabilities within its target markets. One such acquisition is sure to be the recently announced purchase of US-based helmet maker Team Wendy.