Shares in Diploma have surged to an all-time high after the UK supplier of specialised technical products inked a deal to acquire US-based Peerless Aerospace Fastener for around £236m.
The FTSE 100 company’s stock price leapt 11 per cent on Wednesday after it announced the transaction, which it expects to compete within the next few weeks following regulatory approval. The firm became the biggest riser on the blue-chip index.
Diploma said the acquisition would “be immediately accretive to group growth and operating margin”. It said the deal would drive eight per cent earnings per share accretion during the first 12 months of ownership.
Peerless supplies the US and European aerospace industry with fastening products, including nuts, bolts, screws and rivets.
Diploma touted the New York-based firm’s status as “one of the largest independent value-added distributors of aerospace fasteners with a strong reputation for quality and breadth of product, speed to market, and value-add customer service”.
Johnny Thomson, Diploma’s chief executive, commented: “Peerless is an excellent acquisition for Diploma, aligned to our strategy of building high quality, scalable businesses for sustainable organic growth.”
He added: “We know and like the aerospace fasteners market and Peerless significantly extends our US capabilities and adds scale in Europe. The business is already generating strong performance and there are significant opportunities to enhance returns by working together across our existing businesses.
“We expect Peerless to extend our track record of acquisitions that drive organic growth at great returns, as part of our focus on continuing to deliver sustainable quality compounding.”