Directors at Latchways, the Devizes-based manufacturer of protection equipment for people working at height, are recommending a £124m takeover offer to its shareholders, saying it would open up new markets and boost product development.
Latchways shares soared by nearly 50% last Tuesday morning after the bid from MSA UK Holdings, a subsidiary of US-based safety equipment manufacturer MSA Safety, was announced to the London Stock Exchange.
The shares have remained high and were this morning trading at £10.75, a 43% premium on the closing price ahead of the takeover announcement.
MSA safety products include hard hats and flame detectors. It is listed on the New York Stock Exchange and has a market value of $1.6bn. It is bidding £11 per share for Latchways, which floated on the London Stock Exchange’s AIM market in 1997.
In a statement to shareholders, Latchways said its acquisition would strengthen its distribution network outside Europe, particularly in the US.
Latchways chairman Paul Hearson said: “MSA is offering our shareholders an attractive premium to the recent share price. Although the prospects for Latchways as an independent company remain strong as the company continues to execute its strategy of strengthening its routes to market, the board of Latchways also recognises the potential benefits to the business, including employees and all stakeholders from combining with the MSA Group.
“Latchways is a successful global fall protection business with a strong focus on innovation and as such represents a good cultural fit for MSA.”
Latchways CEO David Hearson added: “Latchways has been dedicated to protecting the safety of individuals working at height for over 40 years. Over that time Latchways has pioneered market leading fall arrest systems, whilst providing unrivalled technical and customer support through its exceptional engineering and sales teams.
“Our investment in new product development has produced a portfolio of leading products, which is highly complementary to MSA’s own range of personal safety products. MSA will provide a larger global distribution platform that will allow Latchways products to protect individuals across the globe and support the ongoing success of the business.”
MSA, established in 1914, said the acquisition would extend its global reach in the fall protection sector. Latchways systems would complement its portfolio of global safety products, providing “a comprehensive line-up of technologies and solutions that strengthen MSA’s market position and provide greater global reach and scale”.
MSA president, chairman and CEO William M. Lambert said: “The acquisition accelerates a key element of our corporate strategy and our core product focus in that it extends our fall protection product offerings, particularly within the area of engineered systems.
“Equally important, MSA stands to benefit from Latchways’ innovative products and technology, which ultimately strengthens our combined new product development pipeline. I fully expect the combination of our customer relationships, engineering capabilities, marketing expertise, and distribution networks will provide great new opportunities for our combined organization.”
MSA’s core product groups include self-contained breathing apparatus, fixed gas and flame detection systems, portable gas detection instruments, industrial head protection products, fire and rescue helmets and fall protection devices.
In June Latchways, which sells its products to the building, maintenance and utility industries, said it was recovering from a “disappointing two years” as it unveiled a fall in annual sales and profits.
It reported a 14% drop in revenues in the year to March 31 to £33.1m with pre-tax profits down 28% to £4.9m.
It blamed a difficult year in its European markets while its North American business had been affected by customer de-stocking. However, sales in the UK and Latin America had held up well, it said.
