Diploma Acquires Distribuidora Internacional Carmen For Initial 170 Mln Pounds

Diploma PLC(DPLM), a U.K.-based industrial distributor, on Thursday announced the acquisition of Spain-based Distribuidora Internacional Carmen SAU, or DICSA, a distributor of fluid power solutions into the European aftermarket, for an initial consideration of approximately 170 million pounds or 200 million euros.

The initial consideration has been paid in cash, funded from the Group’s recent equity raise and existing debt facilities.

In addition, up to approx. 19 million pounds is payable, based on DICSA achieving stretch profit targets in 2024 and 2025.

The acquisition is expected to immediately add to earnings; add approx. 5 percent to EPS growth during the first full year of ownership, and would cover its cost of capital from the outset. The business would also be accretive to the Group’s organic growth and margins.

For the 12-month period ended 31 December 2022, DICSA generated revenue of 87.7 million euros and adjusted EBIT of 20.2 million euros. DICSA has also achieved long term organic revenue CAGR of 11% with EBIT margins of more than 20%.

DICSA is a value-add distributor of a diverse range of hydraulic hoses, fittings and components, similar to the products offered by the company’s UK Aftermarket Seals business, R&G.

The acquisition is expected to provide a strong strategic fit to the business, adding to its established positions in the US and UK, expanding its aftermarket fluid power capability and accessing key strategic markets in Continental Europe.

Shares of Diploma closed Wednesday’s trading at 2964 pence, up 68 pence or 2.35 percent from the previous close.

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