On a day when European stock markets have been sent plunging on concerns about the global spread of the deadly coronavirus, health, safety and environmental technology developer Halma (HLMA) bucked the sell-off.
Shares in the company rose 10p to £21.72, making it one of just three FTSE 100 companies to make gains. Private hospitals operator NMC Health (NMC) and gold and silver miner Polymetal (POLY) are the other two risers on Monday.
Halma is popular with investors after it continued its long-established strategy of making value-adding bolt-on acquisitions. The £8.25bn company said it had purchased US-based NovaBone, a designer and manufacturer of bone graft products, for an initial $97m, or around £74m.
An additional $40m (£30.5m) could also be paid out to NovaBone owners if certain performance targets are meet over the next couple of years.
MEDICAL MARKET EXPANSION
NovaBone’s equipment is used to accelerate bone regeneration primarily for orthopaedic and dental surgical procedures in the US. NovaBone's management team, who were significant shareholders, will continue to lead the business from its current US base, a typical strategy for Halma, which hands substantial autonomy to acquired businesses.
Halma operators in three core strategic sectors; safety, environmental and health, and NovaBone will fit neatly into the latter.
The UK company typically makes two or three a year bolt-on acquisitions a year and it has also today acquired a 70% stake in Australia-based FireMate for up to A$18.2m (£9.4m). FireMate provides cloud-based fire protection maintenance software to fire contractors, and it will slide into Halma’s wider safety sector and will also continue to be led by its current management team.
Halma has an option to buy the remaining 30% of FireMate during a six month window running from 31 March 2025.
NEW TECH TO BOLSTER FUTURE RETURNS
‘These businesses are exciting additions to Halma, bringing new technologies and market niches to two of our sectors and are highly aligned to our purpose,’ chief executive Andrew Williams said.
Halma has built a strong reputation and investor support base over the years thanks to its long track record of consistent growth and shareholder returns. Its most recent half year results to 30 September 2019 showed growth from across all parts of its business, with 12% top line progress, or 5% if contributions from recent acquisitions are stripped out.
Reported pre-tax profits rose 12% to £105.8m.