Halma: BEA Sensors Group
Former CEO of BEA Sensors Amercias, a Halma Operating Company
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Halma PLC
Why is this company interesting?
Halma is a UK-listed serial acquirer of niche highly engineered industrial or medical products that dominate their respective small markets.The company was founded by David Barber who pioneered the model of rolling up and integrating industrial businesses that have strong market power and durable earnings. Barber’s philosophy, which still underpins Halma’s culture today, is best explained in this short speech.
Today, Halma is structured into three sectors with 50 operating companies: Safety, Medical, and Environmental and Analysis. Each sector has ~20%+ net margin and the group aims for 16% growth in profit before tax every year, half from organic growth and half driven by acquisitions. Halma aims to acquire 15-20 profitable, high quality companies each year and between 2003-13 the company paid on average ~8x EBIT.
The 20-year FCF CAGR is 15% and the 33-year dividend per share CAGR is 5%. This has led Halma to become one of the top performing UK businesses over the last 40 years.
Halma: BEA Sensors Group(January 14, 2022)
Steve Mills
Former CEO of BEA Sensors Amercias, a Halma Operating Company
Steve spent 10 years at BEA, the world's leading sensor manufacturer for automatic doors, a Halma operating company. Halma purchased BEA in 2002 and it remains the second largest operating company with an estimated 100m EUR sales per year. Steve had full responsibility of BEA's P&L in the US market and he reported to the BEA Group CEO in Belgium who reported to the Sector CEO.
In Practise Notes
- BEA Sensors is a near-monopoly in automatic door sensors with IP that is hard to replicate
- How BEA focused on improving organic growth and $$ per door
- Acquisition economics
- It's interesting that because BEA is the second largest opco, HLMA treated the company slightly differently. There were less synergies to integrate with other companies and so it remained more standalone than others post-2015 reorg. This highlights the complexity of a platform-type acquisition model.
Interview Transcript
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