GCIMpac Group acquires Boston Conveyor & Automation in $17m deal, expands US footprint
Corporate acquisitions come in various shapes and sizes. However, for me the key is that they are complementary, synergistic, value/earnings generative, low-risk and culturally aligned.
Today's $17m purchase of Boston Conveyor & Automation by high-speed packaging and automation solutions firm () fits the bill.
Here BCA is a Massachusetts-based supplier (50 staff) of full-line robotic automation, picker & conveyor systems to the food, life sciences and industrial sectors - including importantly upstream food handling capabilities - not only dovetailing perfectly with 's existing markets, but also extending its product portfolio further into the production line.
Better still, both companies service several major clients and have worked together already - emphasizing the strategic logic and lower-risk nature of the transaction.
Indeed, Jim Laverdiere, the former sole shareholder of BCA, will remain with the enlarged group as President in order to assist with the integration and drive the next phase of growth.
But that’s not all.
In terms of the numbers, BCA delivered $2.8m (20% margin) of adjusted EBITDA for the 12 months ending May'24 on turnover of $14.0m, thus putting the deal on a modest trailing EV/EBITDA multiple of 6.1x.
Going forward too, the acquisition is expected to be earnings enhancing (re overhead/procurement savings) and generate significant cross-selling/service synergies across the enlarged group's customer base and geographical regions.
All told, research house Equity Development (target price 550p/share) has upgraded its FY25 revenue (+8%), EBITDA (+9%) and EPS (+3%) to £141.1m, £16.5m and 45.2p respectively, putting the shares at 445p on highly attractive FY25 multiples of 6.2x EBITDA and 9.9x PE.
Lastly, the consideration is a mix of cash ($11m) and $6m of newly issued shares at 430p, which are subject to a 1-3 year lockup period. 's lender has agreed to increase its RCF by £5m to £25m - which according to Equity Development should leave the group with an est Dec'24 y/e net debt balance of -£5.5m (or <0.4x proforma EBITDA).
CEO Adam Holland commenting: "I'm delighted to announce the acquisition of BCA, another key milestone in Mpac Group 's strategic journey, bringing capability upstream of our Langen and Switchback businesses into the Group's customer offering. BCA is a high-quality business with exceptionally talented employees, and further expands Mpac's physical footprint in North America. I am excited by the opportunity to provide the customers of both businesses with an expanded technology capability. I am equally excited to welcome Jim Laverdiere and the wider BCA team to Mpac."
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