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