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24. Acquisitions

There were no acquisitions in 2008.

Finalisation of fair value adjustments in respect of the 2007 acquisition of Teleflex Aerospace Manufacturing Group of Teleflex Inc on 29 June 2007 were finalised in the first half of 2008. There have been no amendments to the provisional fair values disclosed in the consolidated financial statements for the year ended 31 December 2007.

Post balance sheet acquisition

On 5 January 2009, the Group acquired the wing component and sub-assembly operation of Airbus UK which is located on the Airbus Filton site in the UK. The acquisition of the Filton facility delivers considerable benefits as the Group becomes a leading global player in critical wing structures and composites and establishes a strategic supplier relationship with Airbus.

The contractual consideration of £176 million after allowing for pension funding and other employee related matters will result in an aggregate cash payment of up to £136 million to Airbus. This amount comprises an initial cash payment of £96 million paid on completion with a subsequent amount payable following finalisation of acquisition date inventory adjustments and £36 million payable in annual instalments over the six years 2010–2015 contingent on revenue metrics. Professional fees and other costs directly attributed to the acquisition are expected to amount to £6 million. The cash spend in 2008 on this acquisition was £1 million.

The fair value exercise is at an early stage and due to its proximity to the year end it is impracticable to determine appropriate fair values. Provisional book and fair values will be disclosed in the Group’s 2009 Half Year Report. Initial unaudited book values at the date of acquisition recorded in 2009 management accounts reflect fixed assets of £48 million and inventory of £41 million.

As previously included in announcements to the Stock Exchange it is expected that the Filton operation will generate sales in 2009 of approximately £375 million and will be earnings accretive and cash generative. 2009 trading margin is estimated at 6% before the impact of fair value adjustments, particularly to inventory and property, plant and equipment, which will be determined during the fair value exercise.

On completion of the acquisition the Group secured additional borrowing facilities amounting to £180 million.

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