Smiths buys German x-ray unit for £235m

By Liz Vaughan-Adams
Wednesday 04 December 2013 06:10
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The aerospace and medical systems group Smiths agreed yesterday to buy Rheinmetall's x-ray business for £235m in an attempt to tighten its grip on the booming detection and airport security markets.

The purchase of Heimann Systems, which is based in Wiesbaden and employs 700 staff including 450 in Germany, is Smiths' fourth detection acquisition since it entered the market five years ago. Heimann's x-ray systems are mainly used to inspect luggage and freight and to detect explosives and other hazardous or illegal contents.

"Heimann, our fourth detection acquisition, makes Smiths a world leader in integrated security systems, and will substantially increase the size of our addressable markets in homeland defence and security," Keith Butler-Wheelhouse, the chief executive, said.

The purchase comes just a week after Smiths made bullish noises on its growth prospects in defence and anti-terrorist detection systems as it posted a 9 per cent drop in operating profits for the year to 31 July.

Heimann, whose systems are also used to inspect mail, will be combined with Smiths' trace detection technologies, which detect chemical agents, explosives and narcotics.

Smiths' finance director, Alan Thomson, said the acquisition would add around £5m to profits in the current financial year, boosting detection equipment sales to around 5 per cent of group sales from around 3 per cent.

The company is financing the cash deal, which remains subject to the approval of European regulatory authorities, out of existing borrowings. It hopes to complete the transaction by the end of the year.

In 2001, Heimann recorded a pre-tax profit of £14m on sales of £104m.

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