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ERIKS NV Acquires WYKO Holdings Limited, Great Britain


Executive Board ERIKS group nv


+31 72 54 75 888


17 October 2006



ERIKS group nv has reached agreement for the acquisition of all the shares in the capital of WYKO holdings Limited (hereinafter ‘WYKO’) based in Halesowen near Birmingham, Great Britain.

In Great Britain, WYKO is the largest supplier of engineering components with the related technical and logistics services to the maintenance market. Annual sales are expected to amount to approx. GBP 240 million (EUR 355 million) and the operational result (EBITA) approximately GBP 13.0 million (EUR 19.2 million). The number of employees is over 2000. Some 90% of sales is realised in Great Britain; the remaining 10% through WYKO branch operations in the Netherlands, Belgium, Germany, Slovakia and Ireland and also via specialised manufacturing activities in the United States and Malaysia.

The combined ERIKS/WYKO, with expected joint pro forma annual sales of approximately EUR 850 million and 4200 employees, will be the undisputed European market leader supplying a broad and deep range of engineering components and the related technical and logistics services. The combined ERIKS/WYKO will have strong market positions in Great Britain, the Netherlands, Belgium, Luxembourg, Germany and Poland (the domestic markets) and additional branch operations in various other European countries (France, Ireland and Slovakia), the United States and South-east Asia.

Strategy ERIKS

As stated in our strategic plan within the ERIKS’ annual report, internationalisation of business is ongoing. In the markets of ERIKS’ presence, too, significant consolidation is taking place among manufacturers, distributors and industrial end users. In response to this, the ERIKS group strives to achieve the following commercial objectives:

To build a leading market position in Western and Central Europe in order to become a truly ‘European player’.
To take a strong market share (in the top 3) for all core activities in its range, in all regions where the group has its own branch operations.
To offer an extensive range of high-quality mechanical engineering components.
To possess and offer a high level of know-how so as to be an innovative supplier.
To have a balanced distribution of sales across the main customer types (buying profiles) of ‘Maintenance’ (MRO) and ‘Original Equipment Manufacturers’ (OEM) to control its risk profile.


The acquisition of WYKO is a significant step towards meeting the abovementioned commercial objectives:

WYKO is the largest supplier of engineering components (particularly power transmissions, sealing technology, fluid power and maintenance products) in Great Britain with a market share of 10-15%.
WYKO will provide the ERIKS group with a major position in a new domestic market.
WYKO has a well-developed range of technical and logistics services.
WYKO will strengthen the position of the ERIKS group in its existing markets.
WYKO’s operations are detailed further in appendix 1.


The new combination ERIKS/WYKO will lead to a significant strengthening of the market position and offers good growth opportunities, such as:

better service provision to international customers with operations in several countries;
expansion of WYKO’s product range in Great Britain with the other product groups of ERIKS;
expansion of the product range at ERIKS branch operations with WYKO products and services.
Additionally, there are opportunities to realise cost savings.

A project group will be set up for realising the above synergy opportunities.

Intended expansion ERIKS group nv Executive Board

WYKO’s management is comprised of:
  • Bill Wilson, CEO (51)
  • Mark Dixon, COO (42)
  • Jonathan Cook, CFO (48)
The Supervisory Board of ERIKS group nv intends to propose to the shareholders at an Extraordinary General Meeting of Shareholders to appoint Bill Wilson and Mark Dixon as new members of the Executive Board of ERIKS group nv as from the time of conclusion of the acquisition.

Acquisition price and financing

The acquisition price amounts to GBP 139 million (EUR 206.0 million) on a debt and cash free basis. The acquisition will initially be financed with a bridge loan. This bridge loan is expected to be taken out partly by new senior debt and partly by an equity offering (approx. EUR 120 million) envisaged to take place later in 2006 or in the beginning of 2007. Rabobank has guaranteed the bridge loan and the new senior debt under the usual conditions. A prospectus containing the details of the equity offering will be made available at that time. Rabo Securities will act as Sole Global Coordinator and Bookrunner for the offering.

Extraordinary General Meeting of Shareholders

A proposal to approve the acquisition of WYKO will be submitted to the shareholders of ERIKS in accordance with Section 2:107a of the Dutch Civil Code. For this purpose an Extraordinary General Meeting of Shareholders will be held in Alkmaar. The notice for convocation will follow shortly. Besides the approval of the transaction, the main items on the agenda will include the envisaged appointment of Messrs.

Bill Wilson, the current CEO of WYKO and Mark Dixon, the current COO of WYKO to the Executive Board of ERIKS group nv as well as delegation to the board of directors of the authority to issue new shares in the share capital of ERIKS group nv for the purpose of the repayment of the bridge loan.
Shareholders wishing to attend the meeting are requested to follow the instructions in de advertisement giving notice of the meeting, which will be published in ‘Het Financieele Dagblad’ and in de Daily Official List of Euronext Amsterdam.


The following parties act as advisors to ERIKS group nv for the acquisition:
  • Fortis Corporate Finance and Capital Markets
  • De Brauw Blackstone Westbroek
  • PricewaterhouseCoopers.
This press release is not for release, publication or distribution in, or to the United States, Canada, Australia or Japan. This release does not constitute or form part of an offer to purchase, sell or subscribe for any securities of ERIKS group nv. Any such offer will be made by means of a prospectus to be issued by ERIKS and any decision to purchase or subscribe for securities should be made solely on the basis of the information contained in such prospectus.

This press release is also published in Dutch. In the event of any conflict of interpretation the Dutch version prevails.

Conference calls with the Executive Board of ERIKS group nv on 17 October 2006:

09:30 CET press conference

Dial in: +31 20 531 58 33
Replay: +31 70 315 43 00 (code: 125 589#)
The replay will be available from 17 October up to and including 1 November.

11:00 CET analysts’ conference

Dial in: +31 20 531 58 46
Replay: +31 70 315 43 00 (code: 125 590#)
The replay will be available from 17 October up to and including 1 November.

WYKO General

WYKO was founded over 40 years ago in Great Britain. Between 1980 and 2000 WYKO experienced strong growth by acquiring many local distributors. In 1999 an investment fund of the Royal Bank of Scotland delisted WYKO. In the years following some further acquisitions were realised and the product range was expanded.

WYKO now consists of a number of know-how driven and specialised business units which each serve their individual markets. The core of WYKO is WYKO Industrial Services (WIS), an engineering and distribution organisation with approx. 110 branch operations of its own and 103 ‘insites’ within customers. WIS’ annual sales currently total approx. GBP 218 million (EUR 323 million). In addition, four specialised companies are part of WYKO. These develop, manufacture and sell a number of specific technical components under their own brand names. The annual external sales of these four companies totals GBP 22 million (EUR 32.5 million).


WYKO Industrial Services (WIS) is divided into:

  • WYKO Industrial Distribution (WID) with approx. 80 branch operations, 18 ‘insites’ within customers and a national distribution centre in Birmingham;
  • WYKO Electrical and Mechanical Engineering Services (WEMS) with 30 branch operations;
  • WYKO Integrated Solutions (IS) with a further 85 ‘insites’ within customers.

WYKO Industrial Distribution (WID)

This unit, with approx. 80 branch operations, 18 customer insites and 660 employees, offers the total products and services range to the MRO market. WID realises external sales of approx. GBP 100 million. Depending on the customer type, the market is approached by national account managers, regional representatives, specialised sales engineers and a national call centre.

WYKO Electro Mechanical Engineering Services (WEMS)

With approx. 30 branch operations, some of which are shared with WID, and 548 employees, this unit realises sales of approx. GBP 35 million. The repair activities include the repairing of electric motors, pumps, gear boxes and electronics and also the provision of condition monitoring services.

WYKO Integrated Solutions (IS)

This fast growing activity realises external sales of approx. GBP 70 million with 300 employees. Services are provided in-house to customers with a generally small team of 3 to 5 employees. In addition to the WYKO core products and services many other ‘consumables’ are also purchased and supplied.

Mutual relationship between WID, WEMS and IS

The mutual relationship between the traditional role of a stockist distributor, the option of offering comprehensive logistics concepts and the repair and monitoring activities of the WEMS shops strengthen the three separate activities.

WYKO International

From its own branch operations in the Netherlands, Belgium, Germany, Slovakia and Ireland, products and services are offered to international customers. A branch operation in the Czech Republic is being set up.

The specialised companies:

  • Rencol (sales GBP 8.0 million)

    This company with operations in Great Britain and Malaysia develops and manufactures a range of tolerance rings for applications in the automotive and computer industry.

  • Revolvo (sales GBP 2.5 million)

    This company develops and manufactures a range of specialised bearings and supplies them to industrial end users and distributors.
  • WYKO Tire Technology (sales GBP 9.0 million)

With manufacturing operations in Great Britain and the USA, tooling is developed and manufactured for the global tire industry.
  • Pioneer Weston (sales GBP 2.5 million)

    This company develops and manufactures a range of mechanical rotary axle seals.

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