Spirax-Sarco Engineering to acquire Vulcanic for £225.5m

Spirax-Sacro Engineering shares were up 2.5% to 10,315p in early morning trading on Monday following its announced negotiations to acquire the Vulcanic group of companies from French private equity firm Qualium for £225.5 million on a cash and debt-free basis.

Vulcanic operates as a European industrial electric heating group, and is currently the largest supplier of bespoke industrial heating solutions across the continent.

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The company is based in France and holds 10 manufacturing facilities internationally with over 700 employees, of which 90% are situated in Europe, the Middle-East and Africa.

Spirax-Sacro Engineering confirmed Vulcanic would support the delivery of growth in the manufacturing group’s Electric Thermal Solutions (ETS) business through existing customers, products and operational footprints to complement its existing Chromalox business, which is predominantly based in the Americas.

The engineering firm added that Vulcanic would support Spirax Sacro Engineering’s drive to help customers decarbonise their critical industrial processes via electrification, building on high demand already present among European customers.

Spirax-Sacro commented the acquisition of Vulcanic was expected to be accretive to its earnings in FY 2022.

The group noted that the regulatory conditions of the merger were scheduled to close by Q3, with the consideration to be financed through an acquisition bank facility.

Vulcanic reported revenues of £76.8 million in FY 2021, along with an EBITDA of £15.2 million and an EBIT of £13.8 million on an adjusted pro-forma basis for the financial term.

The company confirmed gross assets of £186.8 million for 2021, including goodwill from previous Vulcanic acquisitions.

“We are looking forward to welcoming colleagues from Vulcanic into our Group.  We have been following Vulcanic for some time and believe the acquisition represents an excellent opportunity to broaden our addressable market and further deploy our industry leading technologies in Europe,” said Spirax-Sacro Engineering CEO Nicholas Anderson.

“Vulcanic’s existing strength and scale in Europe – with further investment by our Group – will provide a fantastic platform for growth, especially for our recently launched portfolio of TargetZero solutions, which electrify heat generation for industrial processes to support our customers’ decarbonisation objectives.”  

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