LONDON (April 26)—Conveyor belt maker Fenner P.L.C. is buying polymer seals maker Wellington Holdings P.L.C. in a bid to expand its molded seals and precision polymers business areas.
Fenner will spend $86.4 million to buy Wellington, which reported sales last year of $62.1 million, nearly half of which was generated in North America.
"This is a very exciting opportunity for both companies," Fenner CEO Mark Abrahams said in a joint statement. As well as materially expanding Fenner's precision polymers activities, "Wellington's operations should quickly benefit from our strong presence in many of the markets it has targeted for growth," he said. The deal also underlines Fenner's ability to pursue other strategic opportunities as they arise.
Following the purchase, Fenner will be in a position to benefit from potential growth in the energy market and recovery in industrial markets, the statement said. Wellington's seals business will gain technical synergies, cost savings and "an attractive platform to acquire other international businesses," the statement continued.
For the six months ended Feb. 28, Fenner reported pretax operating earnings of $12 million on 17-percent better sales of $310 million, the bulk of which comes from the conveyor belting business. Fenner will raise $98 million via a share placing, which will be used to fund the purchase as well as allow for future growth and acquisitions, Fenner said.
Wellington is represented in North America by Hallite Dynamic in Troy, Mich., and CDI Polytek USA in Humble, Texas.