Sunday 22 September 2019

Cash-rich PM Group has €50m in fire power for acquisitions

Expansion: PM Group says it sees acquisition targets in the US and Europe
Expansion: PM Group says it sees acquisition targets in the US and Europe
John Mulligan

John Mulligan

IRISH engineering services company PM Group has more than €50m in financial fire power to make acquisitions and expects to seal deals by next year, according to chief financial officer Larry Westman.

The company, sitting on more than €30m in cash, has been hunting for additional acquisitions for some time.

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The US remains a key venue for acquisitions, but Mr Westman said other countries, including the Netherlands, Belgium and Switzerland, also have firms of interest.

"We've a very robust acquisition process under way," Mr Westman told the Irish Independent. "We've looked at a number of different opportunities in all those locations, but nothing is fitting at this stage.

"We have a reasonable pipeline and we'd be hopeful as we go into next year that we'd see some acquisitions clicking into place at that point."

He pointed out that PM Group is currently debt-free, providing acquisition headroom in excess of €50m, "for the right type of acquisition".

Mr Westman spoke as PM Group reported financial results for 2018.

Its reported revenue soared 41pc to €406m, although that figure was flattered by an increase in so-called 'pass through' revenue and costs incurred on behalf of clients.

Fee revenue, which more accurately reflects its trading performance, rose 13pc. Operating profit jumped 71pc to €15.6m.

PM Group primarily works on high-end projects for clients working in sectors such as pharmaceuticals, food and technology. Among its clients are Boston Scientific, MSD, Eli Lilly, Johnson & Johnson, BT Group and Glanbia.

PM Group chief executive Dave Murphy told the Irish Independent that the pipeline of foreign direct investment capital projects in Ireland for the next 12 to 18 months remains strong.

Mr Murphy said he does not think that a hard Brexit would discourage capital spending by UK companies beyond a year or two.

"We've seen that slowdown in capital spending for a couple of years now," he said of the UK market.

"A hard Brexit would prolong it rather than make it worse. You'd hope that, even if it's a hard Brexit, within a year or two, people have figured out what that really means. Businesses can't keep putting off investment forever."

Irish Independent

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