Specialist engineer IMI agrees £118m deal to buy Heatmiser
Specialist engineer IMI agrees to £118m deal to buy Heatmiser, citing growing importance of ‘smart buildings’
- IMI said it plans to acquire Heatmiser for an upfront payment of £110m
- Heatmiser to be integrated into IMI .’s Hydronic Engineering business
- Gordon Kay initially started Heatmiser as an electrical contracting company
Engineering firm IMI has agreed to purchase a major UK thermostat manufacturer as part of measures to expand its presence in the ‘smart buildings’ market.
The FTSE 250 company told investors on Tuesday that it plans to acquire Heatmiser for an upfront payment of £110 million, followed by a further payment of up to £8 million, subject to future financial performance.
IMI believes the move will help capitalize on the growing demand for smart temperature controls, which it predicts will accelerate in the coming years due to the need for “more energy efficient, smarter and greener” buildings.
Acquisition: IMI has agreed to acquire Heatmiser, a Blackburn-based thermostat manufacturer, as part of measures to expand its presence in the ‘smart buildings’ market
According to IMI, more than 200 million buildings in Europe need upgrades to improve their energy efficiency and comply with environmental legislation.
Heatmiser will be integrated into IMI’s Hydronic Engineering division, a supplier of heating, ventilation and air conditioning equipment.
Founded in 1968 as an electrical contractor by Gordon Kay in Blackburn, Lancashire, the group is now one of the UK’s largest suppliers of smart room thermostats and underfloor heating systems.
It is currently run by Gordon’s children, Martyn and Sarah Kay, who will remain part of the company after the deal closes, which is expected to take place in late 2022.
Heatmiser is expected to generate approximately £22.5 million in revenue this fiscal year, while the acquisition is expected to ‘promote growth, margin and profit’ for IMI within three years.
Roy Twit, IMI’s chief executive, said the acquisition is “fully aligned with IMI’s strategy to deliver significant shareholder value by solving industry challenges and putting customers at the heart of what we do.”
“This is an important, strategic entry point to the fast-growing connected controls market, which will accelerate our organic growth within IMI Hydronic.
“There has never been so much urgency to deliver energy efficiency and comfort in buildings, and Heatmiser is a leader in this field.”
In addition to the Heatmiser announcement, IMI released a third quarter trading update, revealing the seventh consecutive quarter of organic sales growth thanks to solid performance from its OEM precision fluids division.
Higher demand from the energy, oil and gas sectors also helped boost its critical engineering business’ order book by 11 percent.
At the same time, the company said its restructuring program would deliver £10 million in benefits this year, and £20 million in subsequent years.
Due to its strong trading output and taking into account market conditions, IMI has raised its outlook for annual earnings per share to between 103p and 106p.
IMI Shares were 4.4 percent higher at £13.78 just before trading closed on Tuesday, although their value has fallen by about a quarter in the past 12 months.
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