Spirax-Sarco Engineering PLC recently announced that it had agreed on a €59 million deal to sell its air humidification unit, HygroMatik GmbH, to Carel Industries. For the uninitiated, HygroMatik has its headquarters in Hamburg, Germany, and is among the leading industrial and commercial air humidification equipment manufacturers and brands in Europe.
Records confirm that HygroMatik had been integrated into Spirax Sarco Group in 1988 but was always operating separately from the Steam Specialties unit, owing to restricted strategic fit. According to Spirax, its ability to improve sales growth while maintaining the profitability of HygroMatik had been limited due to this low level of integration.
Nichola Anderson, Spirax CEO, mentioned in a statement that HygroMatik has proven to be an excellent member of the Group over the past thirty years and is a high quality company. Now, by joining Carel, the company should deliver an even stronger performance as it will be a better strategic fit there, he added.
The profits gained after the unit is sold, minus relevant fees, would not be included in the adjusted operating profit, Spirax-Sarco said, but would be shown in the reported statutory profit of the group’s 2018 financial results. Sales of HygroMatik, for the year ending 31 December 2017, were £13.0 million, with its EBITDA amounting to £4.1 million and operating profit of £3.9 million.
For Carel Industries, the move to acquire HygroMatik forms part of its strategy to grow via external lines for reinforcing its core businesses and acquire market shares in the reference geographical areas. Experts believe the integration of HygroMatik would help Carel consolidate its position in the German-speaking nations as well as rest of the Northern Europe region.
The exclusive technological, commercial and strategic know-how which Carel has been developing throughout its 45-year existence would benefit this acquisition, allowing the companies to explore further growth options, experts added.