Avon Rubber’s acquisition of e2v’s thermal imaging camera business, Argus, is firmly in line with the group’s strategy of either developing internal capabilities, or acquiring niche bolt-on technology, to enhance its product and systems offering. With largely complementary fire and first responder customers, as well as the addition of a thermal imaging capability to Avon’s product suite, we see the deal as providing another piece to the jigsaw to strengthen Avon’s position in the global fire market. Avon is paying £3.5m for the business, which generated c £5m of revenues in its last financial year, and management expects the deal to be modestly earnings enhancing in FY16.
Avon Rubber announced it had acquired the thermal imaging camera business from e2v for £3.5m. The deal is funded from existing debt facilities and is expected by management to be modestly earnings enhancing in FY16. At this stage we are maintaining our FY16 forecasts ahead of preliminary results on 18 November.
The acquisition demonstrates a clearly developing pattern, whereby Avon is either internally developing capabilities or seeking niche bolt-on acquisitions, to strengthen and develop its product portfolio and systems offering. This has been evident over the past few years, starting with Project Fusion and subsequently supported by the acquisitions of VR Tech for rebreather technology, Hudstar for electronics control and now thermal imaging. With Dairy also following a similar strategy, we believe that Avon has a significant pipeline of future opportunities to maintain its growth.