Bodycote plc, headquartered in Macclesfield, Cheshire, UK, has announced the acquisition of two US-based heat treatment and Hot Isostatic Pressing (HIP) focussed businesses for $145m (£119 million), along with plans for the opening of a new HIP facility in Southern California.
The companies purchased are Lake City Heat Treating, based in Warsaw, Indiana, and Stack Metallurgical Group based in Albany, Oregon. Lake City HT, is reported to be a leading medical market HIP and vacuum heat treatment business primarily supplying the orthopaedic implant market as well as civil aerospace customers. Stack Metallurgical Group is a key provider of HIP, heat treatment and metal finishing services primarily for the civil aerospace, defence and energy markets.
The two businesses are said to be highly complementary to Bodycote’s existing operations and will both expand its geographic footprint in North America and provide additional customer reach.
“These investments are an important and exciting enabler of our strategy to further enhance and grow our Specialist Technologies businesses,” stated Stephen Harris, Group Chief Executive of Bodycote plc. “In addition, they will also expand our footprint in aerospace and medical heat treatment on the West Coast and in Indiana in the US. The acquisitions will enhance group margins, are accretive to earnings per share and allow us to further capitalise on the structural growth opportunities in the space, civil aerospace and medical markets.”
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New HIP facility in greater Los Angeles
Additionally, Bodycote announced plans to open a new HIP plant utilising one of the group’s existing sites in greater Los Angeles, California. This capacity is expected to become operational during 2024 and will support the rapid growth in space and civil aviation markets in the Los Angeles area.
Harris added, “The proposed new HIP plant in greater Los Angeles will allow Bodycote to take advantage of the burgeoning HIP market in space and civil aerospace in the region. It will require only modest investment as it utilises an existing Bodycote site and existing HIP vessels that are immediately available for installation.”
“Optimal allocation of capital to drive shareholder value remains a top priority for the Group and these investments reflect this,” he concluded.