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Mpac Group plc (LSE:MPAC), a global leader in high-speed packaging and automation solutions, has announced the acquisition of Boston Conveyor & Automation, Inc. (BCA), a US-based provider of robotic automation and conveyor solutions. The acquisition is valued at $17 million and is expected to enhance Mpac’s earnings per share in the first full year following the deal.
Details of the Acquisition
- Consideration: The total consideration for the acquisition consists of $11 million in cash and $6 million in the form of 1,059,349 new ordinary shares issued at an issue price of 430.0 pence per share, the closing mid-market price on 17 September 2024. The newly issued shares, known as Consideration Shares, are subject to lock-in and orderly market provisions.
- Financing: The cash component will be funded through Mpac’s existing cash resources and a Revolving Credit Facility (RCF). The Group’s lender has agreed to increase the RCF by £5 million to £25 million to maintain a robust balance sheet and ensure available borrowing facilities for ongoing development and working capital.
About Boston Conveyor & Automation
- Background: Founded in 2017 and based in Newburyport, Massachusetts, BCA specializes in robotic automation and conveyor solutions for the food, life sciences, and general industry sectors. The company employs 50 staff and offers a comprehensive range of process-oriented packaging, pick and place lines, and conveyor systems.
- Strategic Fit: The acquisition aligns with Mpac’s strategic goal of becoming a market leader in full-line packaging solutions. BCA’s offerings complement Mpac’s existing solutions, particularly in product handling and packaging. Both companies share several clients and have previously collaborated on customer projects, underscoring the strategic value of the acquisition.
Strategic Benefits and Future Plans
- Growth and Synergies: Mpac plans to leverage its global sales and service network to support BCA’s growth and integrate its capabilities into Mpac’s core markets, including healthcare and food and beverage. The acquisition is expected to deliver sales and service synergies and provide a significant growth opportunity in the EMEA region, a market previously unaddressed by BCA.
- Leadership and Integration: Jim Laverdiere, the former sole shareholder of BCA, will continue as President to lead the company through its next growth phase. Mpac aims to enhance BCA’s strategic growth plans while integrating its technology and expanding its market presence.
