18 July 2016 – acquisition

The company has announced the acquisition of Synpac, a specialist manufacturer of vacuum bags and pouches for the food processing industry on what appear to be very favourable terms.  The acquisition should be earnings enhancing in the first full year of ownership.  The consideration is £2.79m cash paid on completion and a further £0.31m payable after 12 months, which will be funded through increased debt facilities provided by Barclays Bank as announced on 4 July.  The normalised sustainable EBITDA of the acquired business is estimated to be £0.6m.  We believe that acquisitions will continue to drive shareholder value.  BUY.