Essentra to acquire protective caps and plugs manufacturer BMP TAPPI
In a significant move, global essential components giant, Essentra plc, has announced its acquisition of BMP TAPPI, a top-tier Italian manufacturer and distributor of protective caps and plugs, for an upfront cash consideration of EUR 33.5 million. This acquisition comes as a decisive step in Essentra’s inorganic growth strategy unveiled in November 2022.
Rooted in Milan and boasting over six decades of consistent growth, BMP TAPPI has carved a niche in manufacturing and distributing a vast range of protective caps and plugs. Their products, originating from state-of-the-art Italian facilities, find clientele mainly in Europe, spanning sectors like mechanical, automotive, and pharmaceuticals. BMP TAPPI, which has been trading with Essentra for two decades, has a well-nurtured relationship with the global company. Their commitment to sustainability is evident in their ongoing R&D efforts, resulting in a series of sustainably-sourced products in their existing portfolio.
Further marking Essentra’s disciplined inorganic strategy, this acquisition comes on the heels of the successful incorporation of the Wixroyd Group in December 2022. With BMP TAPPI, Essentra aims to amplify its core product range, extend its manufacturing expanse in Europe, and unlock potential cost and revenue synergies. The newly-acquired entity will be steered by Essentra’s seasoned Italian management team.
The acquisition financials encompass an initial EUR 33.5 million cash consideration, supplemented by a deferred contingent consideration of up to EUR 3.5 million. BMP TAPPI’s projected revenues for the year ending 31 December 2023 stand at EUR 13.4 million. Funding for this acquisition stems from Essentra’s existing debt facilities, largely backed by low-interest, long-term fixed debt, and free cash flow.
Slated for completion by 2023-end, subject to regulatory nods, this acquisition promises to bolster Group margins. Essentra’s CEO, Scott Fawcett, expressed his enthusiasm about the BMP TAPPI acquisition, emphasizing its alignment with Essentra’s vision of expanding its European presence and capitalizing on cross-selling prospects.
In closing, the acquisition is seen as a testament to Essentra’s aggressive inorganic growth strategy, leveraging its robust balance sheet to seize expansion opportunities and integrating quality businesses that enhance both earnings and margins.