Intertek buys Moody in deal worth £450m

SHARES in safety services provider Intertek jumped yesterday after it revealed an 11 per cent profit increase and plans to acquire a rival.

Profit before tax for the FTSE 100 listed firm hit £211.9m for the year to 31 December 2010, up from £191.5m a year earlier. Consensus forecasts had estimated pre-tax profits of £209m.

The quality control company, which tests a range of products from toys and footwear to computers, also reported revenues of £1.4bn for the period.

Underlying profit at the firm stood at £206.5m, whilst a final dividend of 18.8p per share will be proposed at the group’s annual general meeting in May.

Intertek also said it had agreed to buy technical inspection and certification firm Moody International, adding to its international reach.

The group will spend £450m on Moody, buying the Sussex-based company from private equity house Investcorp.

The deal, which is funded entirely in cash, will help Intertek to expand its presence in Asia and other emerging markets, where Moody has significant expertise. Intertek said it expects pre-tax cost synergies to reach £6m within three years.

Chief executive Wolfhart Hauser said: “As market conditions continue to improve, the enlarged group is very well positioned to continue its record of strong organic revenue growth of high single digits.

Shares in the firm closed up five per cent at 1,994p per share.