(Bloomberg) — Spectris Plc agreed to sell its U.S. process measurement and control instrumentation business to private equity firm Arcline Investment Management for $525 million in cash.
The deal values Omega Engineering at about 20.4 times its adjusted earnings before interest, taxes, depreciation and amortization for 2021, Spectris said in a statement Tuesday. Arcline will combine Omega Engineering with Dwyer Group, a sensor maker it acquired last year, according to the statement.
Bloomberg News reported in March that Spectris was exploring a sale of the non-core unit. The divestment is expected to be completed early in the third quarter, the British testing equipment firm said in Tuesday’s filing.
Separately, Spectris announced plans to buy back as much as 300 million pounds ($390 million) of stock. An initial tranche of 150 million pounds will be launched shortly, according to the statement. Spectris shares were up 3.9% at 8:32 a.m. Tuesday in London, giving the company a market value of about 2.9 billion pounds.
Andrew Heath, who took over as chief executive officer at Spectris in 2018, had been working on a turnaround of Omega Engineering that included bringing in new management. Analysts at HSBC Holdings Plc in February valued the business at about 327 million pounds.
Spectris agreed to buy Connecticut-based Omega Engineering in 2011. The business was founded in 1962 by Betty Hollander, who in her own home started engineering thermocouples, a temperature-measuring device used for everything from industrial processes to aircraft engines to automotive sensors as well as home appliances.
The divestment strengthens Spectris’s balance sheet, giving it the ability to invest more in research and consider acquisition opportunities ranging from smaller bolt-on deals to larger-scale purchases, the company said. Mergers and acquisitions remain a key strategic component of Spectris’s strategy, according to the statement.
Jefferies Financial Group Inc. was sole financial adviser to Spectris on the sale.
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