Halma Acquires RCS

On 30 May 2014, Halma completed the acquisition of RCS. RCS (www.cosasco.com) is a world leader in the design, manufacture and sales of pipeline corrosion monitoring products and systems into diverse industries including Oil, Gas, Petrochemical, Pharmaceutical, Chemical and Utilities. RCS is located in Santa Fe Springs, California, USA and has offices in Canada, UK, UAE, Singapore, China, Australia and Houston, Texas, USA.

Halma paid a cash consideration to RCS’s private shareholders of $108 million (£64.7 million) for the share capital plus $8.0 million (£4.8 million) for cash retained in the business. The consideration is adjustable $ for $ if the completion accounts show a Net Tangible Asset Value (NTAV) for RCS above or below $13.9 million (£8.3 million). The acquisition, which is expected to be immediately earnings enhancing, has been funded from Halma’s existing cash and debt facilities.

Unaudited accounts for RCS for the financial year ended December 2013 showed revenue of $44.4 million (£26.6 million) and profit before interest and tax, adjusted for non-recurring expenses, of $11.0 million (£6.6 million).

The existing RCS management team will remain in place and will continue to operate the business. RCS will join the Halma Process Safety sector, collaborating with businesses which already operate in the same industries with similar long-term market growth drivers, including increasing safety requirements.

Andrew Williams, Halma’s Chief Executive, commented:

“The acquisition of RCS expands our portfolio of critical safety products which are sold into the Energy and Utility markets to protect life and operational assets. Our Process Safety sector has delivered strong organic growth over the past decade and RCS’s international presence combined with potential technology collaboration with other Halma companies offers exciting new opportunities to sustain that success in the future.”

SALE OF MONITOR ELEVATOR PRODUCTS, INC. (‘Monitor’)

On 30 May 2014, Halma completed the sale of Monitor Elevator Products, Inc. to Innovation Industries Inc. Cash consideration of $6.0 million (£3.6 million) was paid at completion, of which $0.9 million (£0.5 million) was retained in escrow for release in two years. Consideration is adjustable $ for $ to the extent net assets are more or less than $2.5 million (£1.5 million). For additional information, see Note 3. 

Andrew Williams, Halma’s Chief Executive, commented: 

“Monitor has delivered good value for shareholders over almost 20 years under Halma's ownership with a strong focus on manufacturing customized control panels for elevator modernization in the north-eastern USA.

“This no longer fits well with our global market-leading door safety sensor and display product business, which remains an important contributor to Halma's Infrastructure Safety sector.  We wish Monitor further success under Innovation's ownership.”