Alantra advises Diploma PLC on the £100m plus acquisition of R&G Fluid Power

Apr 2022

Buy-side advisory

Value c£100m

UK – Alantra, the global investment banking firm, has advised Diploma PLC (“Diploma”), the international group distributing specialised products and services, on its acquisition of R&G Fluid Power (“R&G”) for ca.£100m. R&G is a high quality aftermarket distributor that will accelerate the Group’s strategy and build scale in Diploma’s Seals Sector businesses in the UK.

R&G is a value-added distributor of a diverse range of industrial, hydraulic and pneumatic products (including seals and gaskets). Its value-added proposition is based on responsive customer service, technical advice, breadth of stock and product customisation. Over time, the management team has built a platform with extensive reach across the UK. This has included consolidating a number of regional distributors to extend geographic and product reach. The R&G historic growth track record, organic and inorganic, has been impressive.

Diploma’s strategy is to build high quality, scalable businesses for organic growth. Acquisitions are an integral part of the strategy, with a disciplined focus on acquiring value-added businesses, with great management teams, to accelerate its organic growth.

R&G has significant organic growth potential, including: developing the aftermarket e-commerce channel, continued regional expansion in the UK, and further product cross-selling and diversification. The business gives Diploma’s Seals Sector scale in the UK and the ability to drive revenue synergies with existing UK Seals businesses. R&G will broaden the Seals product capability in line with the strategy to expand addressable markets through product extension, with the potential to take this to other markets in the future. An active pipeline also positions R&G well to continue to deliver on acquisition growth. Following the acquisition, R&G’s experienced and highly capable management team will remain with the business. 

Alantra’s UK Industrials team, including Keith Pickering, Richard Benyahia and Tom Nash, advised Diploma. The team has been very active over the last six months, having also advised on the sales of Silicone Engineering to Rogers Corporation, Axis Electronics to Cicor Group, Readypower Group to Angel Trains and Tornado Group to Storskogen.

Keith Pickering, Partner and UK Head of Industrials, said, “We’re proud to have introduced Diploma to R&G Fluid Power and then support the team through the transaction. Diploma’s highly regarded Seals Sector supplies specialised products and value-added services to a range of end markets globally. This acquisition adds scale and product capabilities to that sector, where it has strong synergies with R&G.”

Steve Sargeant, Corporate Development Director, Diploma PLC, said, “I’d like to thank the UK Industrials team at Alantra for bringing this opportunity to our attention. You quickly grasped the qualities Diploma were looking for in an acquisition target and it is gratifying to know that investing the time to explain Diploma’s acquisition strategy to you was time well spent. Your continued support through to completion was invaluable, bringing an added dimension to our acquisition and diligence process.”