Spirax Sarco in exclusive talks to buy thermal engineering company

Spirax Sarco

Spirax-Sarco Engineering plc, the world leader in the control and efficient use of steam, electrical thermal energy solutions and peristaltic pumping and associated fluid path technologies, announces that it has entered into exclusive negotiations with a view to acquiring Thermocoax and all of its group companies (Thermocoax) from Chequers Capital, TCR Capital and other minority shareholders for a cash-free, debt-free consideration of £139 million.

Thermocoax is a leading designer and manufacturer of highly engineered electrical thermal solutions for critical applications in high added value industries.  Its core technology is mineral insulated (MI) cable, which comprises single or multiple conductor wires insulated by magnesium oxide, all enclosed within a tubular metal sheath.  This construction is extremely robust compared with standard polymer insulated cables and highly resistant to extreme environments such as high temperatures, pressures, vibration and radiation.  These cables are transformed into bespoke high value-added functional products, such as heaters and sensors, for specialised, highly certified, critical applications.  A particular advantage of Thermocoax’s cable heaters is that they are small in size and low in weight compared with conventional tubular heaters allowing precise delivery of heat.

Thermocoax is headquartered near Paris, France and has three manufacturing facilities in Normandy, one in Georgia, USA and a further facility in Heidelberg, Germany.

Spirax Sarco anticipates that Thermocoax will become part of its Chromalox business and will significantly enhance its electrical process heating business, especially in Europe.  Thermocoax enables the company to address critical high value applications where product cost is a secondary concern to reliability and performance.

The U.S. market holds significant potential for Thermocoax. It has grown substantially there in the last five years but is constrained by lack of critical mass and local credentials. Chromalox has scale, contacts and reputation in the U.S. that can support faster penetration of the market as well as enhancing its offering to its own customers.

In Europe, Thermocoax is expected to strengthen Spirax Sarco’s market position, capabilities and brand recognition in a broad range of attractive industries and applications beyond those where Chromalox currently operates.

In the rest of the world both Thermocoax and Chromalox rely mainly on agents and distributors and the potential combination of the two businesses will allow us to accelerate our direct sales investments in these markets. 

The purchase will be financed from existing cash and debt facilities.

Upon completion of the exclusive negotiations, the transaction will require certain regulatory approvals in France, Germany and the USA.  These regulatory approvals are expected to be satisfied during the second quarter of the year.

Nicholas Anderson, Group Chief Executive of Spirax-Sarco Engineering plc, said: “We look forward to welcoming Thermocoax, its management and employees into the Spirax Sarco family.  The combination of Thermocoax and Chromalox will significantly strengthen our electrical thermal energy solutions presence in Europe while expanding our technology and product offering worldwide.  We believe that the global Spirax Sarco footprint will allow both businesses to expand more rapidly into new geographic areas providing sustainable value creation for customers and shareholders.”