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(Sharecast News) - Renold announced the acquisition of Italian transmission chain manufacturer Ognibene for ¬10m in cash on Wednesday, expanding its presence in the Italian and wider southern European markets.
The AIM-traded firm said the deal included an initial payment of ¬9m, with a further ¬1m due 12 months after completion.
Founded in 1948 and based in Bologna, Ognibene manufactures and distributes high-quality transmission chain and ancillary products, serving sectors including packaging machinery, distribution and food processing.
The acquisition would allow Renold to improve its customer service in the region by offering local stock of its full product range, while also generating manufacturing synergies across its international operations.
Renold said the acquisition was expected to be immediately earnings accretive and would deliver a return on invested capital above the company's weighted average cost of capital within the first year.
Ognibene generated ¬15.6m in revenue, ¬1.5m in EBITDA and ¬1.3m in pre-tax profit in the year to December 2024.
The business would continue to be led by its existing management team, which would join Renold's European leadership group.
"Ognibene is a fantastic business with an excellent reputation in the Italian and broader southern European market, with whom we have had a relationship for over 30 years as an importer of Renold chain in Italy," said chief executive Robert Purcell.
"This deal will allow us to deepen our presence in a key geographic market, while allowing increased production volumes in Renold's international manufacturing operations.
"Ognibene represents our fourth chain acquisition in just over three years and continues to demonstrate the momentum we have in identifying and executing value-creative, bolt-on acquisitions."
At 1107 BST, shares in Renold were up 0.06% at 80.65p.
Reporting by Josh White for Sharecast.com.
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