Success at last as Siebe buys APV
15 Jan 2000
UK engineering giant Siebe has finally succeeded in buying process equipment maker APV - more than a decade after it launched its first bid for the company. Siebe, the parent company of Foxboro, is to pay £327million for the company.
The deal gives Siebe access to APV's ranges of valves, pumps and heat exchangers, while giving it access to APV's strongholds in the pharmaceuticals, food and drink sectors. Siebe is already strong in chemicals, oil and gas, utilities and pulp and paper. Moreover, it allows APV's products to be sold as a package with Foxboro's Intelligent Automation Windows NT software systems. The merged company becomes the largest supplier to the drugs, food and drinks industries, with 11 per cent of the market; it will also hold 14 per cent of the total £3.6billion global automation systems market, putting it in second place behind Honeywell/Measurex.
Siebe gains a new sales and engineering force over a thousand strong, who will sell Foxboro systems to existing clients. Moreover, comments Siebe chairman Barrie Stephens - chief executive at the time of the original bid - the company expects to secure `significant cost benefits' from combining Siebe and APV's global networks of local engineering, contracting and customer services operations.
Siebe attempted to take over APV with a £182million bid in 1986. The board and shareholders rejected the offer back then, but now, after five consecutive years of restructuring provisions and woeful profit margins, APV's board recommended the offer and shareholders agreed. APV scraped together profits of £15million on sales of £772million last year; Siebe's offer values that company at 59 per cent more than its share price on the day the offer was issued.
