Our acquisition strategies for each of the divisions are as follows:
We will supplement this organic growth by
continuing to target bolt-on acquisitions
to expand our product range and our
geographic footprint within our existing
markets and to extend our Oil & Gas
presence into adjacent attractive markets
including subsea. We will also consider
expanding our product range to include
semi-severe and configured opportunities
in each of our key sectors.
Our Precision Engineering division offers
significant potential for accelerated
growth. However, harnessing this
potential will take time. In the first phase
of our plan we will address the existing
infrastructure, including simplifying
the organisation, implementing robust
systems and improving operational
performance. Once the division is
operating optimally we will look to
supplement growth by targeting
larger scale acquisitions.
The growth plan in our Hydronic
Engineering division is predominantly
organically focused. However, there is
potential to grow the division through
acquisition. Any addition would need
to satisfy stringent criteria including,
in particular, building critical mass in
the North American market.
Strategy in action
4. Expanding our addressable markets through targeted acquisitions
• North America
• Europe
• Latin America
• Asia
• Aftermarket >30%
• Growth rate >5% pa
• Customer intimacy
• Barriers to entry
• Criticality of application
• Predictable aftermarket
• Potential to double addressable market
• Leverage existing positions in attractive end markets i.e. Oil & Gas
• Non-valve related products and businesses
Geographies
Market dynamics
Products
Broadening the acquisition universe
We will supplement our organic growth initiatives with targeted acquisitions, capable of
producing returns in excess of the Group’s weighted average cost of capital within three years.
Beyond our existing business portfolio, we have identified the potential to double the Group’s
addressable market by making acquisitions in adjacent non-valve product markets. Criteria
for such acquisitions include a focus on North American revenues, strong aftermarket
dynamics and critical products that create significant barriers to entry.
22
IMI plc
