Patience is a virtue, and an essential ingredient for M&A. Carefully surveying the environment, not swinging for every ball, nurturing the best ideas and thoroughly doing the due diligence. Before finally putting pen to paper, and signing on the dotted line. Likewise this morning, after waiting 18 months for the right deal, MPAC announced that it had purchased Lambert Automation Limited for £15.0m (excluding a 3 year £2.5m earnout). To us, this strategic acquisition is synergistic, relatively low risk (re similar businesses) and value accretive. Not only from the perspective of being earnings enhancing, but also more importantly delivering RoIs significantly above the enlarged group’s cost of capital.
Here, Lambert employs circa 160 staff, is HQ’d in Tadcaster (North Yorkshire) and is one of the country’s leading designers, manufacturers and project managers of bespoke automated production line equipment (see below). Supporting MPAC’s key medical, healthcare, food and FMCG verticals (eg Procter & Gamble, Philips and ConvaTec), alongside offering back office, property, supply chain, procurement and overhead savings, as the 2 firms are integrated over the next 12-24 months.
What’s more, there are considerable top line synergies too. X-selling products/services into each other’s extensive customer lists. Further internationalising Lambert’s revenues (23% UK) over MPAC’s broader geographical footprint, especially in North America, Europe and AsiaPac.
And lastly, offering clients total ‘end-to-end’ production/packaging solutions from design & build, through to installation & aftermarket support. Duly simplifying their entire procurement, commissioning and operating processes, coupled with reducing ‘whole of life’ costs.