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Here’s Why Diploma Share Price Skyrocketed Today

Nigel Firth
Nigel Frith trader
Updated 23 Sep 2020

Practice Stock Trading
Diploma

Diploma (LON: DPLM) share price rose over 20% today after the supplier of the technical products agreed to buy the US-based Windy City Wire for £357 million. The deal is expected to be completed in two months’ time.

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The idea behind the deal is to increase the company’s presence in its core business, as well as expand its activities in the United States. Windy City Wire is a low voltage wire and cable supplier.

“In year one, the transaction is expected to be both significantly earnings enhancing and cover our cost of capital, while allowing us to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions as opportunities arise,” said Diploma’s Chief Executive Johnny Thomson.

In order to fund the purchase, Diploma announced a share placing yesterday. Moreover, the firm recommended a dividend payment of 30.0p per share for the full-year to September 30.

Diploma stock price gained 20% on a deal to acquire Windy City Wire for £357 million September 2020

Diploma share price rose over 20% today to hit a 6-month high at 2052p.

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Nigel Firth
Nigel has been in the regulated financial services industry for nearly a decade, has previously owned a financial brokerage and has written many times for sites relating to personal finance and trading.