Small cap pump manufacturer Hayward Tyler (HAYT:AIM) is up 7% this morning at 85p after sealing a $15 million (£9.8 million) deal to acquire UK-based steam turbine specialist Peter Brotherhood.

Part of industry giant Siemens (SIE:FRA), the  Peterborough-based unit generated $46.7 million in revenue and $3.2 million in operating profit in the year to 31 December 2014.

The deal, funded by £14 million of new facilities from RBS (RBS), should be immediately earnings enhancing, according to a statement today.

HAYT - price to book value

Management is also looking at a potential sale and leaseback of a Peterborough property in order to free up more funds.

Hayward, a leader in the niche glandless boiler circulating pumps industry, has the largest installed base of the products in the world, according to analysts at N+1 Singer.

Buying Peter Brotherhood looks like the next step following impressive progress at the business over the last few years.

Operating margins have increased from 7.2% in 2011 to 11% in 2014 and management targets an improvement to 15% in the medium term.

HAYT man and pump

Investment has also been made in a Luton plant as Hayward plans ahead of an increase in power-related work in coming years. Its pumps are employed in conventional and nuclear power, as well as the oil, gas and chemical industries.

Earnings per share for the year to 31 March 2015 was forecast at 8p by N+1 analyst Mark Gibbon in an August research note. Forecasts have not been updated following the announcement of the Peter Brotherhood deal.

Issue Date: 12 Oct 2015