Acquisition Builds on Graco’s Oil & Natural Gas Equipment Business
Base
MINNEAPOLIS--(BUSINESS WIRE)--Oct. 1, 2014--
Graco Inc. (NYSE: GGG), a leading manufacturer of fluid handling
equipment, announced today that it has acquired the stock of Alco Valves
Group (Alco), a United Kingdom (U.K.) based manufacturer of high
quality, high pressure valves used in Oil & Natural Gas, and other
industrial processes. Established in 1977, Alco offers a portfolio of
widely known brands, including Alco Hi-Tek, Alco Valves, Alco Sub-Tek,
and Alco Process. Alco has developed global business relationships with
Oil & Natural Gas industry customers who are well known and recognized
as leaders in their space.
“Gaining additional exposure to the Oil & Natural Gas industry is a
logical extension for Graco and a strategically important initiative
that will support our long-term sales and profit goals,” said Patrick J.
McHale, Graco President and CEO. “Alco manufactures a comprehensive
range of technically advanced high integrity valve products, a strong
fit with Graco’s core competencies of designing and manufacturing
advanced flow control technologies. The Oil & Natural Gas industry’s
growth trends are positive and we believe that enhancing our position in
this space will pave the way for future growth opportunities.”
Alco operates manufacturing facilities in both Manchester and Leeds,
U.K. In addition, it has warehousing and sales operations in Houston,
Texas, Toronto, Canada, and Singapore. The newly acquired business will
maintain its manufacturing and engineering base in the United Kingdom.
“This is a terrific opportunity for Alco and our employees,” said Stuart
Lomax, Alco President and owner. “Graco has the financial resources to
invest in and grow the business, and I am confident that this is the
right move at the right time to take our company to the next level of
global competition.”
Alco generated approximately £19 million of revenue and approximately £6
million of EBITDA in the most recent trailing twelve months. The
acquisition was an all cash transaction which closed for £72 million and
is subject to normal post-closing purchase price adjustments.
ABOUT GRACO
Graco Inc. supplies technology and expertise for the management of
fluids and coatings in both industrial and commercial applications. It
designs, manufactures and markets systems and equipment to move,
measure, control, dispense, and spray fluid and powder materials. A
recognized leader in its specialties, Minneapolis-based Graco serves
customers around the world in the manufacturing, processing,
construction, and maintenance industries. For additional information
about Graco Inc., please visit us at www.graco.com
or on Twitter @GracoInc.
Cautionary Statement Regarding Forward-Looking Statements
Graco desires to take advantage of the “safe harbor” provisions
regarding forward-looking statements of the Private Securities
Litigation Reform Act of 1995 and is filing this Cautionary Statement in
order to do so. A forward-looking statement is any statement made in
this release that reflects our current thinking on the acquisition of
Alco Valves. All forecasts and projections are forward-looking
statements. Forward-looking statements generally use words such as
“expect,” “foresee,” “anticipate,” “believe,” “project,” “should,”
“estimate,” “will,” and similar expressions, and reflect our Company’s
expectations concerning the future. Forward-looking statements are based
upon currently available information, but various risks and
uncertainties may cause our Company’s actual results to differ
materially from those expressed in these statements. Graco undertakes no
obligation to update these statements in light of new information or
future events.
Future results could differ materially from those expressed, due to the
impact of changes in various factors. These risk factors include, but
are not limited to: whether and when we will realize the expected
financial results and accretive effect of the transaction, how
customers, competitors, suppliers and employees will react to the
transaction, economic changes in the oil & gas industry and in global
markets, and whether we successfully integrate the newly-acquired
business. Please refer to Item 1A of our Annual Report on Form 10-K for
fiscal year 2013 (and most recent Form 10-Q) for a more comprehensive
discussion of other risk factors that relate generally to the our
business and financial condition. These reports are available on our
website at www.graco.com/ir
and the Securities and Exchange Commission’s website at www.sec.gov.
Shareholders, potential investors and other readers are urged to
consider these factors in evaluating forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements.
Investors should realize that factors other than those identified above
and in Item 1A might prove important to our future results. It is not
possible for management to identify each and every factor that may have
an impact on our operations in the future as new factors can develop
from time to time.
Source: Graco Inc.
Graco Inc.
James A. Graner, 612-623-6635
or
Media:
Bryce
Hallowell, 612-623-6679
bhallowell@graco.com