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SDI Group plc announced the acquisition of Peak Sensors Holdings Limited, a UK manufacturer of temperature sensors, completed on 3 November 2023. The total consideration is forecast to be approximately £2.4 million, comprising an initial cash payment of £1.58 million and an expected balancing payment of approximately £0.82 million. For the year ended 31 March 2023, Peak Sensors reported revenues of approximately £2.1 million and EBIT of c.£330,000, and has approximately 14 employees.
| Date | 6 Nov 2023 |
| Time | 07:00:10 |
| Category | Acquisitions and alliances |
| ID | 4066S |
SDI Group plc
("SDI", the "Company" or the "Group")
(AIM: SDI)
Acquisition of Peak Sensors
SDI Group plc, the AIM quoted Group focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications, is pleased to announce the acquisition on 3 November 2023 of Peak Sensors Holdings Limited ("Peak Sensors" or "Peak"), a UK manufacturer of temperature sensors (the "Acquisition"). Total consideration is forecast to be approximately £2.4m.
Highlights:
· Peak Sensors is a leading UK manufacturer of temperature sensors, specialising in standard and bespoke thermocouples and resistance thermometers which are used in various industries, including glass, ceramic, incinerators (including energy from waste), cement, and ovens.
· Peak is based in Chesterfield with a 5,300 sq ft leasehold facility, and has approximately 14 employees.
· Revenues for the year ended 31 March 2023 were £2.1m, with EBIT of c.£330,000.
· Peak will join the Group's Sensors and Controls division.
· Acquisition is expected to be earnings enhancing in the first full year of ownership.
Ken Ford, Chairman of SDI said: "The acquisition of Peak is a further step in our Group growth strategy, demonstrating again the opportunities to acquire businesses with high quality products with export growth potential. The Acquisition is expected to be earnings enhancing in the first full year of ownership. We are delighted to welcome Roshan Aucklah, Peter Smith and their staff at Peak to the SDI Group."
FURTHER INFORMATION ON THE ACQUISITION IS SET OUT BELOW
Enquiries
SDI Group plc 01223 727144
Ken Ford, Chairman
Mike Creedon, CEO
Ami Sharma, CFO
Cavendish Capital Markets Limited 020 7220 0500
Ed Frisby/Seamus Fricker- Corporate Finance
Andrew Burdis/Sunila de Silva - ECM
SDI designs and manufactures scientific and technology products for use in digital imaging and sensing and control applications including life sciences, healthcare, astronomy, plastics and packaging, manufacturing, precision optics, measurement instrumentation and art conservation. SDI operates through its subsidiaries: Atik Cameras, Synoptics, Graticules Optics, Sentek, Astles Control Systems, Applied Thermal Control, MPB Industries, Chell Instruments, Monmouth Scientific, Uniform Engineering, Scientific Vacuum Systems, Safelab Systems, LTE Scientific, Fraser Anti-Static Techniques and Peak Sensors.
Corporate expansion is via organic growth within its subsidiary companies and through the acquisition of complementary, niche technology businesses with established reputations in global markets.
The following information is disclosed in relation to the Acquisition.
About Peak Sensors
Peak Sensors comprises three companies: Peak Sensors Holdings Limited and two wholly owned subsidiaries, Peak Sensors Limited and Peak Sensors (Property) Limited. Peak Sensors Limited is the main trading company in the Group, employing all members of staff.
Peak Sensors is a leading UK manufacturer of temperature sensors, specialising in standard and bespoke thermocouples and resistance thermometers. With over 25 years of experience, the company serves various industries, including glass, ceramic, incinerators (including energy from waste), cement, and ovens. Peak exports to more than 85 countries in 6 continents, with approximately 17% overseas sales.
For the year ended 31 March 2023, Peak Sensors achieved revenues of approximately £2.1m, EBIT of c.£330,000, and the Group's statutory profit before tax was c.£367,000 (all consolidated, unaudited).
Peak Sensors operates from a single site in Chesterfield. Roshan Aucklah, CEO since 2017, will stay on to lead the business under SDI Group ownership. Peter Smith, one of the founders of the business, will stay on as a consultant. Peak has approximately 14 employees.
Acquisition rationale
The Acquisition is in line with the Group's strategy of acquiring businesses with complementary scientific and technology products, with capable management teams in place and with opportunities to grow further under the SDI Group structure. Peak will join SDI's Sensors and Controls division. The SDI Board considers that there are long term growth drivers for Peak's products and services internationally.
Consideration for the Acquisition
Total consideration is estimated at £2.4m and consists of:
· Initial cash consideration on completion of £1.58m; and
· A balancing payment in cash shortly after completion, expected to be approximately £0.82m, which is dependent on the total consolidated net assets of Peak Sensors Holdings Limited at completion. The acquired net assets are expected to include a small cash balance being Peak's ongoing cash working capital.
The cash consideration will be funded from the Group's revolving credit facility with HSBC UK Bank. As at 30 September 2023, the Group had cash of approximately £1.8m (unaudited), bank debt of £15.1m (unaudited) and £9.9m of undrawn bank facility (excluding accordion).
No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.