Specialist manufacturer Avon Rubber has sold its historic dairy industry business for £180m, leaving it to grow its larger protective equipment division through strategic acquisitions.
Melksham-based Avon Rubber’s Milkrite InterPuls division, which has been bought by Swedish group DeLaval, is a world leader in producing milking equipment for the farming industry.
The division had revenues of £26.3m in the six months to the end of March, having grown sales by 8.5%.
It had also grown its order book by £1.2m to £4.9m.
Avon Rubber chief executive officer Paul McDonald said: “This transaction represents an important step in the strategic development of Avon Rubber.
“Milkrite InterPuls has been an important part of the group over many years.
“However, having achieved our valuation expectations, the board believes the time is right to allow this business to grow and flourish under new ownership.”
Rubber milking equipment was among the first products made by Avon when it was launched in 1881. The business grew in parallel with its rubber tyre operations, later becoming Milkrite and adding InterPuls when it acquired the Italian business of the same name in 2015.
Today its products – which range from portable milking equipment to flow meters – are used all over the world from South Africa to Thailand.
Avon Rubber said the £180m would be paid when the deal was completed and following regulatory approval – likely to be next year. Following adjustments and other costs Avon said it expected to receive around £160m.
The group said it had agreed with the trustees of its UK pension scheme to make a one-time contribution of £20m, to strengthen the scheme’s funding position following completion.
Avon will use the rest of the proceeds to strengthen its balance sheet and target acquisitions to support the growth of its Avon Protection business, which makes respirators for military, homeland security and first responder customers.
Milkrite InterPuls’s managing director Craig Sage and finance director Andrew Porter will transfer to DeLaval along with all other Milkrite InterPuls employees.
“The proceeds of the transaction will provide further funding capacity, enabling us to take advantage of acquisition opportunities to deliver significant strategic and financial value against our clear criteria and enhance our capabilities within our target markets,” said Mr McDonald.
DeLaval, which can trace its own history back more than 130 years, today employs around 4,500 people and operates in more than 100 markets around the world. It is part of the giant Tetra Laval Group.
