Spectris plc acquires SciAps to enhance precision measurement solutions

Spectris plc (SXS: LSE), a leader in precision measurement, has announced a definitive agreement to acquire SciAps Incorporated, a specialist in handheld instruments, for a total consideration of up to $260 million (£205 million). This acquisition, comprised of an upfront payment of $200 million (£157 million) and a deferred payment of up to $60 million (£47 million), marks a significant expansion in Spectris’ portfolio, particularly in the materials analysis sector.

Based in Boston, Massachusetts, SciAps has carved a niche in high-growth markets with its advanced X-ray Fluorescence (XRF) and Laser Induced Breakdown Spectroscopy (LIBS) technologies. These handheld instruments are crucial in industries pivotal to the circular economy and energy transition, such as mining, metal recycling, and battery materials. SciAps’ integration into Spectris’ Malvern Panalytical division aligns with Spectris’ strategy to enhance its technological offerings and access new markets.

The acquisition promises to deliver significant synergies, estimated at around $6 million (£4.7 million), through enhanced cross-selling opportunities and expanded distribution networks. This strategic union is expected to accelerate Spectris’ digital strategy, enabling real-time evaluation and decision-making capabilities for customers.

SciAps is projected to achieve sales of $70 million (£55 million) by the end of December 2024, with an impressive five-year revenue compound annual growth rate (CAGR) of over 30%. The acquisition is set to be accretive to earnings from the first year, with anticipated strong financial returns aligning with Spectris’ capital allocation framework.

Spectris had a net cash position of £398 million at the end of May, and the acquisition will be funded through cash. This financial strategy ensures that Spectris remains robust in its net cash position, with substantial balance sheet capacity for future investments and a £150 million buy-back program scheduled for completion by the year’s end.

Andrew Heath, CEO of Spectris, emphasized the strategic importance of this acquisition: “Value enhancing M&A is central to our compounding growth strategy. SciAps is an excellent business and a great addition to Spectris Scientific, strengthening our offering and accelerating sales through enhanced digital solutions and a broader product portfolio.”

Don Sackett, CEO of SciAps, also expressed enthusiasm about joining Spectris, highlighting the complementary technologies and potential for enhanced customer solutions that the merger will foster.

This acquisition by Spectris plc not only broadens its technological capabilities but also strengthens its position in strategic markets influenced by sustainability and advanced manufacturing trends. The integration of SciAps’ handheld analytical instruments into Spectris’ product suite is a testament to Spectris’ commitment to innovation and leadership in precision measurement, offering new growth avenues and reinforcing its market presence.