Smiths Group buys US-based manufacturer HCP for $82 million

Smiths Group has acquired Heating and Cooling Products (HCP), a US-based manufacturer of heating, ventilation and air conditioning solutions.

The engineering firm says it acquired HCP for US$82m (£65m) on a cash and debt-free basis from a private seller for less than seven times this year’s earnings before interest, taxes, depreciation and amortization (EBITDA).

The London-based company also announced that HCP will be integrated into its Flex-Tek division.

The engineering giant announced it had acquired HCP for US$82million (about £65million).

The company also said it will continue to expand the group’s presence in North America to “serve customers with an even broader range of products, including HCP’s patented axial and radial seal channel technology that improves energy efficiency.”

Smiths Group shares rose 0.86 percent to £16.36 in midday trade on Wednesday.

Paul Keel, Chief Executive Officer of Smiths Group, said: “Smiths has now posted eight consecutive quarters of growth and the acquisition of HCP allows us to further build on that momentum by adding synergistic capabilities through a value-added transaction in a market we know well.” So.

“We welcome our new colleagues from HCP to Smiths.”

In March, Smiths Group raised its full-year guidance after record-breaking organic sales growth in the first half, thanks to favorable currency movements and demand for building products.

The group expects organic sales to grow 8 percent or more this fiscal year, compared to a previous guidance in January that called for growth of at least 7 percent, again up from a previous guidance.

Total sales rose by £305m to just under £1.5bn in the six months to January, up around a quarter year-on-year, with favorable exchange rate effects accounting for over 40 per cent of the growth.