Avon Rubber (AVON) has sold its milkrite | InterPuls business to DeLaval Holding BV for £180m on a cash and debt free basis, or £160m net, after management agreed to make a one-time contribution of £20m to strengthen its UK pension scheme's funding position following completion.
The dairy arm is a profitable and growing business, contributing 28 per cent of FY2019 revenues. But the deal shows that the group is intent on growing Avon Protection, which has benefitted from a succession of military and/or civil defence contracts, the latest, a $16.3m (£13.0m) sustainment order from the US Department of Defense for the M50 gas mask system.
The proceeds will enhance Avon’s ability to cast around for any suitable bolt-on acquisitions, though it is certainly not a case of the specialist manufacturer buying-in growth – the underlying business continues to impress.
