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RS Group To Acquire Risoul For $275 Mln On Cash-free And Debt-free Basis

RS Group (RSI.L), on Wednesday, said it has agreed to acquire Risoul y Cia, S.A. de C.V., a family-owned distributor of industrial and automation product and service solutions in Mexico, for a cash consideration of US$275 million on a cash-free and debt-free basis.

The consideration represents an acquisition multiple of about 12x adjusted EBIT on a 12-month basis to 30 June 2022.

The acquisition of Risoul by RS Group is expected to deliver significant revenue synergies. Combining Risoul's established presence in Mexico with RS Group's range of complementary and ancillary products, including the company's main own-brand RS PRO, will support increased average order value for existing customers.

The acquisition, which will be financed from RS Group's existing debt facilities, is due to be completed by November 2022, subject to customary closing conditions including Mexican anti-trust. It is expected to be accretive to adjusted EPS in the first full year of ownership and exceed Group cost of capital within three years.

Following the acquisition, RS Group's balance sheet will remain strong, with pro forma net debt to adjusted EBITDA of <0.8x, which provides the capacity to continue driving its growth ambitions.

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