Halma Share Price Traded Sideways Despite Bolt-On Acquisitions

The Halma plc (LON: HLMA) share price traded sideways despite announcing that it had recently completed two strategic bolt-on acquisitions with a combined maximum total consideration of approximately £46.5 million.

In the Environmental and Analysis sector, one of Halma's subsidiaries, Alicat Scientific, Inc. (Alicat), has successfully acquired the Alpha Instrumatics Group (Alpha Instrumatics). Alpha Instrumatics, headquartered in Bradford, UK, is renowned for its expertise in designing and manufacturing precision instruments for measuring trace moisture in gases.

The capability to precisely measure trace moisture levels contributes to the safer operation of industrial equipment, more efficient hydrocarbon transfer, and the accurate detection of pollutants.

Alpha Instrumatics' instruments find applications in thriving markets, including industrial gases, aerospace, and industries associated with the evolving energy transition. This acquisition strategically broadens Alicat's product portfolio, reinforcing its presence in existing and adjacent markets.

The initial cash consideration for Alpha Instrumatics amounts to £31 million on a cash- and debt-free basis, and it will be financed using Halma's existing resources. 

Additional earn-out payments, contingent on Alpha Instrumatics' performance over the financial years ending on March 31, 2025, can reach a maximum aggregate of £5.5 million. 

Notably, Alpha Instrumatics reported consolidated unaudited revenue of £7.8 million for the 12 months ending on September 30, 2023, with a Return on Sales significantly exceeding Halma's target range of 18-22%.

Within the Healthcare sector, Halma's subsidiary, IZI Medical Products LLC (IZI), has acquired AprioMed AB (AprioMed). AprioMed specialises in designing, manufacturing, and distributing medical devices used in bone biopsies. 

This acquisition enhances IZI's offerings for minimally invasive medical procedures, complementing its existing product range used for the diagnosis and treatment of cancer.

The consideration for the AprioMed acquisition amounts to SEK 130 million, which is approximately £10 million on a cash- and debt-free basis, and it will be financed using Halma's existing facilities. 

Marc Ronchetti, Halma’s Group CEO, commented: “Our companies have access to Halma expertise and capital to support their growth locally and internationally.  These bolt-on acquisitions are strongly aligned with our purpose and financial model and will bring complementary capabilities to Alicat and IZI Medical, including new technologies and broader market reach.  We are excited by the opportunities we see for new standalone companies to join Halma and for our existing companies to add new capabilities through bolt-on acquisitions to grow their businesses over the long term.”

Halma share price. 

The Halma share price traded sideways after the company announced two bolt-on acquisitions.