Collagen casing maker Devro acquires Netherland outfit
Sausage casing maker Devro has acquired collagen expert PV Industries in a deal that could pay more than €13.5m.
Devro
329.00p
17:15 13/04/23
Food Producers & Processors
8,020.88
16:59 26/04/24
FTSE All-Share
4,423.59
17:14 26/04/24
FTSE Small Cap
6,484.28
16:59 26/04/24
Devro said it would pay the Netherlands based firm about €12.5m on a debt-free basis, with a possible additional payment of up to €1m under an earn-out arrangement.
Devro which makes collagen casings for the food industry, said PVI offers Devro access to a strong skills base and a developing portfolio. PVI posted earnings of €1.3m on sales of €6.3m last year.
The acquisition is conditional upon regulatory clearance.
Devro group finance director Simon Webb said the acquisition supported its strategy by growing sales of collagen products through product differentiation.
N + 1 Singer, who continues to rate the stock at ‘buy’ said the acquisition, looks ‘sensible.’
In a note analysts said earnings were expected to grow by about half by financial year 2017, although a lot depends how quickly Chinese expansion happens.
Shares in Devro were up 0.49% to 310.75p.