Avon Rubber buys Team Wendy for $130m as FY guidance held

Avon Rubber said it was buying US-based military helmet maker Team Wendy for $130m (£100m) as it maintained full year guidance.

Team Wendy makes helmets for the military and first responder markets, Avon said, adding that it had customers in more than 50 countries across military, law enforcement, and search and rescue.

In an update on trading, Avon said demand had remained robust from first responders across its entire respiratory protection product range while global dairy market conditions have remained positive, driving strong order intake at its soon-to-be-sold milkrite | InterPuls business.

“The Covid-19 pandemic has resulted in only minor disruption across our businesses, with demand remaining strong and operational efficiency enhanced by short term cost savings as a result of our response to lockdown conditions,” Avon said on Wednesday.

“Full year cash conversion is expected to return to normalised levels, following receipt of the delayed payment relating to the rest of world mask contract highlighted in our half year results announcement.”

Avon said it expected to receive around £160m from the dairy business sale, which would pay for the Team Wendy purchase, adding that it would also make a one-off £20m payment to strengthen its pension fund.

Avon said it would be changing its reporting currency to US dollars once the acquisition was completed and it had sold off its milkrite | InterPuls business, with around 90% of revenues and 100% of borrowings in the currency.

It added that dividends for the 2021 financial year and beyond would be set in dollars and converted into pounds for payment.