HMS Networks AB, a global provider of industrial information and communication technology, has entered into a binding agreement with Spectris Group Holdings Limited to acquire the Red Lion Controls business, a well-established US-based provider of industrial automation solutions, through the acquisition of 100% of the shares in Red Lion Controls Inc. and Red Lion Europe GmbH as well as certain assets in other jurisdictions (“Red Lion”), significantly expanding HMS’ presence in the North American market and complementing HMS’ offering.
Red Lion is a well-established US-based provider of industrial automation solutions with an innovative product portfolio with premium brands. The acquisition will significantly strengthen HMS’ presence in North America and enable cross-selling of both HMS’ and Red Lion’s products through their respective market channels.
The acquisition is expected to be accretive to HMS' earnings per share from completion of the acquisition (excluding any non-cash amortization impacts from the transaction). The combination of HMS and Red Lion had annual sales exceeding SEK 4.4 billion, during the twelve-month period ending on September 30, 2023, with an adjusted EBIT margin of approximately 24%. The acquisition is expected to close during the first half of 2024, subject to customary regulatory approvals and closing conditions.
“We are very happy to welcome Red Lion into the HMS Networks family; the companies are a great match both when it comes to products, geographic presence and cultural aspects," said Staffan Dahlström, CEO of HMS. "The combination of Red Lion’s product portfolio, which is complementary to HMS’ offering and has limited overlap, and the geographic match with Red Lion having a strong position in the attractive North American market, and HMS with its core markets in Europe, will generate good cross-selling opportunities.
"We are eager to start working together and to realize the synergies between the companies and to enable each other to take the next steps on our common future journey once the transaction closes.”
