Wednesday, March 5, 2014

News: Roota Engineering set to grow under Pressure

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Rotherham's Roota Engineering Limited is to be acquired by Pressure Technologies, the AIM-listed, Sheffield-based group of companies, in a deal worth £13.5m.

Operating for 40 years, Roota is a sub contract precision engineering company that produces precision components to the tightest tolerances in batches or as prototypes. From a base on the Meadowbank Industrial Estate, it has both CNC and conventional turning and milling capabilities and specialise in the machining of difficult materials and exotic alloys such as inconels and monel.

Pressure Technologies plc owns Chesterfield Special Cylinders, a leader in the design, development and manufacture of high pressure seamless steel gas cylinders, and has gone on to bring in the likes of Chesterfield BioGas and Al-Met Limited and Hydratron group of companies.

The board at Pressure Technologies believes that the acquisition of Roota will deliver exceptional, longer term growth by being part of the enlarged group. It is seen as complementary to the group's other subsidiary businesses and provides cross selling opportunities between the respective customer bases.

Pressure Technologies is acquiring Roota for a maximum consideration of £13.5m (plus cash balances) comprised of an initial net cash consideration of £9.0m (plus cash balances) with additional deferred payments of up to £4.5m, based on the future financial performance of Roota.

With an impressive "blue chip" customer base, Roota specialising in the manufacture of bespoke engineered products for the oil and gas industry, such as components for high added value ball valves, mandrels, connectors and well-head cleaning tools. Roota has 35 employees and upon completion of the acquisition the key members of Roota's management, Matthew Crampin and Nicholas Crampin, will remain with the enlarged business, retaining their long standing roles as managing director and production manager, respectively, of Roota.

For the year ended 30 November 2013, Roota reported revenues of £8m and profit before tax of £2.6m. As at 30 November 2013, Roota had Net Assets of £4.4m.

John Hayward, chief executive of Pressure Technologies, said: "Roota is an ideal acquisition for Pressure Technologies and the support and enthusiasm of both existing and new investors for the deal are testament to this. Roota is profitable, operates in markets we know well and we believe the acquisition will be earnings enhancing. In addition, the business is located just two miles from the group's head office, making it ideally located for a seamless integration with the enlarged group.

"It has been our long-stated strategy to grow the Group both organically and through acquisition. Roota gives us the opportunity to enhance our position in the specialist engineering supply chain to the oil and gas industry. Together with Al-Met, we will have two of the UK's premier, niche component manufacturers respected for both their highly skilled workforce and customer service.

"On behalf of the board, I welcome Matt and Nick Crampin and all the staff at Roota to Pressure Technologies. We look forward to working with them and taking Roota to the next stage of its development."

Pressure Technologies website
Roota Engineering website

Images: Roota Engineering

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