Midland manufacturing giant IMI has agreed a £120.6 million deal to buy German engineering firm Zimmermann & Jansen which will boost its sales to emerging economies.
Zimmermann & Jansen (Z&J) specialises in severe service valves and related flow control products and the takeover will strengthen IMI’s severe service division.
Founded in Germany in 1877, Z&J is a highly respected manufacturer of critical process valve solutions, primarily for the refining and petrochemical and steel markets.
Z&J has a global presence and approximately 40 per cent of Z&J’s sales are in emerging markets, including Russia, India and China. Z&J also has a strong aftermarket business with around two thirds of sales coming from refurbishment, replacement, parts and service.
IMI chief executive Martin Lamb said: “We are delighted to have acquired such a highly respected company as Zimmermann & Jansen.
“It has a strong reputation for its engineering expertise, has market-leading brands and technologies, a good aftermarket business, new products under development and strong customer relationships.
“Zimmermann & Jansen’s activities in the refining and petrochemical and iron and steel markets open up a number of new niche opportunities for the combined business, as does their emerging market exposure, which together should help drive future growth.”
IMI is headquartered on Birmingham Business Park and employs about 13,000 people globally.
Z&J has manufacturing facilities in Germany, US and South Africa and a sales and procurement office in China.
The senior management and approximately 430 employees will be transferring with the business.
In calendar year 2009, Z&J had sales of £111.7 million and underlying operating profit of £13.4 million.
IMI said Z&J would be joining its severe service division, which supplies custom engineered valve, actuation, and control solutions for critical in-plant processes, focusing on the oil and gas markets and power generation.
A spokesman said: “The acquisition of Z&J is highly complementary, both in market terms, extending IMI’s interests into downstream oil and gas – refining and petrochemical – and into iron and steel.
“In technology terms, with Z&J’s highly acclaimed isolation valve technology a natural fit alongside the Truflo technology acquired in 2006. The use of IMI’s global sales and aftermarket infrastructure is expected to improve Z&J’s geographic penetration, in much the same way it has done for the Truflo business.”
IMI has agreed to acquire Z&J Technologies from Valves Investment SA for a cash consideration payable at completion of £120.6 million less net debt assumed with Z&J.
Valves Investment is a Luxembourg-based company, having as shareholders ILP Funds which are European private equity funds advised by J Hirsch & Co.
The value of gross assets and net operating assets to be acquired are estimated at £46.4 million and £16.1 million, respectively. The consideration will be funded out of IMI’s existing resources and banking facilities.
IMI saw sales fall six per cent last year, to £1.18 billion, with pre-tax profits falling 17 per cent, to £211.7 million.