February 18, 2019 / 7:49 AM / 4 months ago

Valve maker Spirax-Sarco in talks to buy France's Thermocoax

(Reuters) - Valve maker Spirax-Sarco Engineering Plc said it had started exclusive talks to buy Thermocoax Developpement, a French insulation products maker, for 158 million euros (£138.46 million) to grow in Europe and the United States.

Cheltenham, England-based Spirax said it was talking to Chequers Capital, TCR Capital and other minority shareholders to buy Paris-based Thermocoax, which makes heat resistant cables, sensors and transmitters used in nuclear, space and aeronautic industries among others.

Spirax has been growing by buying smaller, complementary firms and has snapped up German valve-maker Gestra and U.S. thermal technology company Chromalox in recent years.

Spirax, which made its London market debut in 1959, said Thermocoax would become a part of its Pittsburgh-based unit Chromalox, which works on heat management solutions for piping systems, valves and tanks.

“The U.S. market holds significant potential for Thermocoax. It has grown substantially there in the last five years but is constrained by lack of critical mass and local credentials,” Spirax said, adding that Chromalox could help bridge this gap with its scale and contacts.

Thermocoax, which also makes high-power heaters used in industries and for welding, has three plants in Normandy, France, one in Georgia, United States and a facility in Heidelberg, Germany.

In Europe, Thermocoax will help Spirax’s market position in industries beyond those where Chromalox currently operates, said Spirax.

Thermocoax had reported revenue of 49.8 million euros and core earnings of 12.9 million euros in 2018.

($1 = 0.8843 euros)

Reporting by Noor Zainab Hussain in Bengaluru and additional reporting by Pushkala Aripaka; Editing by Gopakumar Warrier

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