Diploma PLC has announced the acquisition of Peerless Aerospace Fastener LLC for approximately £236m ($300m). Peerless is a leading distributor of specialty fasteners in the US and European aerospace markets, with a strong reputation for quality, organic growth, and operating margin. The acquisition is expected to enhance Diploma's position in aerospace fasteners, expanding its capability in the US and penetrating key strategic markets in Europe.
Aerospace fasteners represent a highly specialized and critical component in aircraft manufacturing, with a 10+ year backlog for commercial aircraft manufacture, supporting sustainable long-term market growth. Peerless, founded in 1952, is an approved supplier to major aerospace companies globally and serves subcontractors to principal OEMs. It has demonstrated impressive organic growth and boasts a highly experienced management team.
The acquisition is expected to be immediately accretive to Diploma's organic growth and margins, with Peerless delivering long-term organic revenue growth and EBIT margins. The funding for the acquisition has been facilitated by the recent restructuring of Diploma's balance sheet, providing the capacity and flexibility for sustained profitable growth.
Overall, the acquisition of Peerless is aligned with Diploma's growth strategy, extending its product range, expanding its reach in the US and Europe, and presenting clear cross-sell opportunities. The acquisition is expected to deliver a compelling financial rationale, with Peerless being immediately accretive to Group EPS and achieving a ROATCE of 15%, more than covering the Group's cost of capital.