(Alliance News) - Diploma PLC on Thursday said it acquired supplier of specialist seals and gaskets PAR Group Ltd for around GBP38 million.

The London-based supplier of specialised technical products and services said PAR supplies a broad range of end markets and its "value-add customer proposition has driven a track record of excellent growth at strong margins".

Diploma said PAR will form part of its UK Aftermarket business in the Seals Sector, adding scale to R&G Fluid Power Ltd's Seal & Gaskets division.

With annual revenue of around GBP13 million, Diploma said PAR will be immediately margin and earnings per share accretive to the group.

The investment represents around a seven times financial 2024 earnings before interest and tax multiple, Diploma said, with returns in the first year of acquisition "well in excess of our cost of capital".

Since the acquisition of R&G in April 2022, Diploma said eight complementary businesses have been added, contributing to "strong" organic compound annual growth rate of around 10% and supporting "excellent" margin progress.

It also noted that, following the announcement of the acquisition of Peerless Aerospace LLC at the end of March, the transaction completed on Wednesday and it is now operating as part of the group.

"I'm delighted to welcome our new PAR colleagues to Diploma, bringing another highly complementary, quality business into the group. PAR has an excellent customer-proposition with clear value-add. It's a fantastic addition to R&G: building capability; further diversifying the customer base; and expanding end markets," said Diploma Chief Executive Officer Johnny Thomson.

Shares in Diploma were up 1.5% to 3,672 pence each in London on Thursday morning.

By Greg Rosenvinge, Alliance News senior reporter

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