HMS Group (HMSG.IL) has reached an agreement to acquire 75% of Apollo Goessnitz GmbH, global operating manufacturer of centrifugal pumps and system equipment. HMS Group would pay 25 million euros cash for 75% of share capital of Apollo Goessnitz GmbH and the transaction would be fully financed with debt capacity.
The Apollo's management team to sell their stake proportionally with the rest 25% to remain under the management control. The value of the deal corresponds to the annualized 2012E EV/Sales multiple of 1.57x and EV/EBITDA multiple of 8.7x based on 2012 budgeted results. Net debt-to-EBITDA(LTM) ratio of 1.98 would remain within internal covenant of 2.5 upon the closing of the deal.
HMS said it would strengthen its product offering with hi-end API pumps for oil refineries, petrochemical and chemical plants on top of the current product offering mainly focused on replacement of existing installed base.
As per Frost and Sullivan's research, the Russian market of pumps for oil refining and petrochemicals was valued at $76.5 million in 2010, while CAGR for 2010-2015E is estimated at 20.3% level. Total HMS share in the market, including Bobruisk Plant, Belorussian pump manufacturer, acquired in 2011, is expected to increase to 30% - 33% in 2015.
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by RTT Staff Writer
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