Proactive Investors - Diploma PLC (LON:DPLM) received a warm reaction from investors after it struck a £236 million deal to acquire US-based Peerless Aerospace Fastener, a distributor of specialist nuts, bolts, screws and rivets.
The transaction is expected to be completed in the next few weeks, the FTSE 100 company said, once regulatory clearance has been received.
Diploma, whose shares jumped 11% to 3,800p after the announcement, said the addition of Peerless for a price of roughly seven times underlying earnings (EBIT) will "immediately" improve growth and operating margins, driving 8% accretion in earnings per share in the first 12 months of ownership.
One of the largest independent value-added distributors of aerospace fasteners, the deal "will add to our established position in aerospace fasteners, extending our capability from aircraft cabin to airframe, accelerating organic growth by significantly expanding our capability in the US with an enhanced product offer and further penetrating key strategic markets in Europe", it added.
According to Peerless's website (see picture), its diverse array of aerospace fastening products includes 26 types of bolts, 17 types of pins, 20 types of rivets, 11 types of nuts, 7 types of washers, 9 types of collars, 6 types of screws, 6 types of clamps, 5 types of fittings, 4 types of bushings, 4 types of spacers, 3 types of inserts, 2 types of sleeves, and 2 types of fasteners.