Halma PLC (LON:HLMA) is expanding across the Atlantic with the US$42.4mln (£32.6mln) cash acquisition of Business Marketers Group Inc., which trades as Rath Communications, a provider of emergency communication systems for Areas of Refuge in the USA.
The FTSE 100-listed safety, health and environmental technology group said the acquisition was completed on 17 January 2019 and is expected to be immediately earnings enhancing.
READ: Halma delivers record first-half profit and revenue, sees rosy future
It added that Wisconsin-based Rath, which will become part of Halma's Infrastructure Safety Sector, had unaudited revenue for the financial year ended December 2018 of US$15.9mln (£12.2mln).
The group said the consideration for Rath, made on a cash and debt free basis, was funded from Halma's existing facilities.
Andrew Williams, the company’s chief executive, commented: "Rath extends Halma's safety communications capabilities and adds a new market niche with its strong position in the Area of Refuge communications market in the USA, where growth is being supported by tightening regulatory standards.”
He added: “Rath is also well positioned to benefit from Halma's strategic Growth Enablers, bringing the potential for collaboration with other Halma businesses in elevator safety and healthcare to drive expansion into adjacent markets focused on the care and safety of the elderly and disabled people.”
In a note to clients, analysts at Shore Capital pointed out that the Rath deal “will add a niche market to Halma’s safety communications capabilities – area of refuge communications.”
They noted: “This market is experiencing tightening regulations, which would help protect Halma’s earnings.”
Shore Capital reiterated a ‘hold’ rating on Halma shares.
In mid-morning trading, the blue-chip stock was 0.7% higher at 1,395p.
-- Adds analyst comment, share price --