Renold, the Manchester-based industrial chain manufacturer, today announced the €24 million acquisition of a Spanish chain company.
YUK SA, manufacturer and distributor of high quality conveyor chains and auxiliary products, was established in 1964 and is based in Valencia.
Renold said it has added high quality Europe-based HVAC manufacturing capability to its current transmission (TRC) and tooth chain manufacturing capability in Europe.
The acquisition significantly increases the group’s access to the Iberian channel market, where it has historically been underrepresented.
And Renold said opportunities exist for significant manufacturing synergies between YUK and its current international operations.
The acquisition will enable Renold to leverage YUK’s strong position in the HVAC market in Spain and Portugal to expand sales of the group’s existing range of premium European TRC products and enable the sale of YUK products across Renold’s extensive European sales network beyond the Iberian Peninsula.
YUK’s management team, which brings many years of industry and market knowledge, will transfer to the group upon completion of the acquisition and will continue to lead YUK, joining Renold’s European management team.
Renold said the acquisition should immediately improve the group’s earnings per share, as well as accretive to the group’s operating margin.
The acquisition comprises €20 million in cash, followed by two further cash payments of €2 million each, payable 12 months and 24 months from the date of completion of the acquisition.
It will be financed from Renold’s existing debt facilities.
As of March 31, 2022, the group’s net debt to EBITDA multiple was 0.6x and, following the closing of the acquisition, is expected to remain below 1.5x. This allows the group to maintain sufficient headroom to execute an identified pipeline of additional opportunities, he said.
YUK achieved revenue of €18.6 million for the 12-month period ending June 2022, generating an EBITDA of €3.1 million.
Renold Managing Director, Robert Purcell, said: “We are delighted that YUK is joining the Renold Group and that we are not only buying an excellent business, but also retaining the services of a very talented group of managers and employees. talented.
“The acquisition of YUK significantly expands and strengthens our European conveyor chain offering, while allowing us to grow in the Iberian market. YUK has a long history of manufacturing and supplying high quality chain products that match well with our own premium product offering.
He added: “The acquisition is expected to improve first-year earnings and result in significant business synergies. We are delighted to welcome the YUK team to the Renold family of companies.