IMI buys radiator valve firm for pounds 97m

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The Independent Online
IMI, the Birmingham-based engineering group, yesterday continued its recent buying spree with the pounds 97m acquisition of Tour & Andersson Hydronics, a leading Swedish manufacturer of heating valves.

The deal is the biggest since IMI paid pounds 130m for Heimeier, Germany's biggest manufacturer of thermostatic radiator valves, at the beginning of last year. It takes the total spend on acquisitions over the last 15 months to pounds 360m.

IMI said adding T&A to Heimeier and its other building products operations would give it control over 20 per cent of the world market for heating valves and fittings, and an even bigger share in Scandinavia.

Gary Allen, the chief executive, said: "IMI has stringent acquisition criteria and this is another acquisition which fits superbly with those criteria."

The Swedish company, which is being acquired for cash from Incentive Group, part of the wealthy Wallenberg family empire, was a rival bidder for Heimeier and the deal would not have made sense had IMI not bought the German company, Mr Allen said.

The company in effect created the market for so-called "balancing valves", which regulate the temperature in heating and cooling systems, after developing and introducing the product in 1963.

Last year it made pre-tax profits of pounds 9.4m on turnover of pounds 67m, giving an exit price/earnings ratio of 14, IMI said.

The group's shares added 10p to 387p yesterday as analysts estimated it would add pounds 3m to profits after financing costs in a full year. Michael Blogg of Charterhouse Tilney described it as "quite neat. Financially it stacks up."

IMI's pro forma year-end gearing would rise 35 points to 46 per cent after the latest deal, but with interest cover "well into the teens" it did not rule out further acquisitions.