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IMI announces the proposed acquisition of speciality valve manufacturer PBM for $85m

IMI plc (LON:IMI) has today announced the proposed acquisition of PBM Inc., for an enterprise value of $85m (£70.3m1). PBM will become part of IMI’s Critical Engineering division. In the year to December 2018, PBM generated revenues of $35.6m (£29.4m), adjusted EBITDA of $6.8m (£5.6m) and adjusted EBIT of $6.3m (£5.2m).

The proposed acquisition of PBM is fully aligned with IMI’s strategy and represents an important opportunity to broaden IMI Critical Engineering’s offering into attractive, adjacent markets. Closing is expected to take place within the next two months, subject to normal merger filings.

PBM overview
PBM is a manufacturer of high-quality industrial valves and flow control products. The company is based in Irwin, Pennsylvania, USA and end-markets include Pharmaceutical / Biotechnology, Consumer Products and Chemical. In its largest segment Pharma / Bio, PBM enjoys a leading market position in the US. The company is owned by the senior management team who will remain with the business post-acquisition, apart from the retiring Chairman.

Transaction highlights

  • The acquisition extends IMI Critical Engineering’s market presence into new, growing segments – including Pharmaceutical / Biotechnology – fully in-line with IMI’s stated strategy.
  • PBM’s reputation for responding quickly to customer needs and developing solutions to industry problems are characteristics that fit well with IMI’s operating model.
  • PBM enjoys strong distributor and representative relationships – particularly within its main US markets. There are clear opportunities to broaden the market access of both PBM and IMI through their respective routes to market.
  • The sharing of best practice between the businesses will facilitate further operational improvement at PBM.
  • PBM will be both margin and earnings accretive to IMI.
  • The acquisition will deliver a financial return in excess of IMI’s cost of capital by the end of year three, before revenue synergies, thereby maintaining the Group’s record of strict financial discipline.

Commenting on the acquisition, Roy Twite, Chief Executive of IMI, said:

“Our strategy at IMI is all about delivering tremendous value by solving industry problems – and putting customers at the heart of our decisions and processes. We are delighted to know that PBM has values and ambitions very similar to our own and I am excited to welcome the company to IMI.”

Jackie Hu, Divisional Managing Director of IMI Critical Engineering, commented:

“I am also thrilled to welcome PBM. The business has fantastic products, a market-leading position and an excellent reputation – particularly in markets that are new to IMI. We are very much looking forward to working with the team and further strengthen and extend our newly combined business.”

Stuart J. Zarembo, Chairman of the Board and CEO of PBM, added:

“We have built an excellent business at PBM with a great team who are excited about the prospects to develop further as part of a like-minded organisation such as IMI plc.”

[1] Exchange rate of £1 = US$1.21 as at close of 15 August 2019 (Source: Bloomberg).

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