7 March 2022

Volex plc

("Volex" or the "Company")

Acquisition of a majority stake in inYantra Technologies Pvt Ltd and property purchase for combined consideration of $13.0 million

Volex plc (AIM:VLX), the global supplier of integrated manufacturing services and power products, is pleased to announce a 51% majority equity investment in inYantra Technologies Pvt Ltd ("inYantra") for $8.0 million (the "Equity Investment") and the purchase of 13.5 acres of industrial land, which includes 3.5 acres of land and the operational buildings used by inYantra, in Pune, India (the "Property Purchase") for $5.0 million.  The Equity Investment and Property Purchase consideration, totaling $13.0 million, will be satisfied in cash on completion from the Company's existing debt facilities. The Equity Investment and the Property Purchase are expected to complete in the next few weeks.

Strategic Rationale

-      inYantra has expertise in printed circuit board assembly and box build integrated solutions, operating from a dedicated manufacturing site.  It has established customer relationships and over 500 employees, led by an entrepreneurial management team

-      Pune, India, is a hub for advanced manufacturing and the location of one of Volex's largest medical customers.  The Equity Investment creates substantial additional opportunities with this customer, as well as providing further growth potential from the domestic and export market

-      The Equity Investment enables a strong combined cross-sell proposition to mid-volume industrial customers in the region

-      The Equity Investment strengthens Volex's ability to provide flexibility and choice to its global customer base in the provision of its vertically integrated solutions, by adding a new manufacturing region to its unique international operating footprint

-      Supporting this strong growth potential, the Property Purchase will allow for an expansion in the range of capabilities the site can offer following the construction of a new 100,000 square foot Medical and Complex Industrial Technology cable assembly facility, with the scope for further development to support expansion in Volex's other segments including consumer electrical and electric vehicles

Transaction Highlights

-      For the year ending 31 March 2022, inYantra is expected to generate revenues of approximately $22.0 million and EBITDA of approximately $1.6 million across consumer electrical and industrial markets

-      The existing management team has delivered compound annual revenue growth of 38% in the last five years and will remain in place to deliver a joint business plan focused on further growth

Nat Rothschild, Executive Chairman of Volex, commented:

"This transaction offers an excellent strategic opportunity to expand our global footprint, which is consistent with our strategy, and will bring new and strengthened capabilities in the key Indian market.  inYantra's existing business, along with the imminent development of a complex cable assembly capability, will improve our customer offering, supporting low-cost manufacturing for existing and new domestic and export customers. Volex sees a further opportunity to improve inYantra's margins by allowing inYantra to leverage the economies of scale from being part of a larger group."

About inYantra

inYantra specialises in the assembly of printed circuit boards and box builds.  It operates from a single site in Pune, Maharashtra, India, with around 500 employees and occupies approximately 3.5 acres of the 13.5 acres site being acquired via the Property Purchase. The business was founded in 2002 and acquired by Pravin Jain of Sonoma Management Partners (SMP) in 2011. Since the involvement of SMP, the business has broadened its customer base, installed three state of the art high speed surface mount technology lines and added numerous industry and quality accreditations. Under the stewardship of an experienced management team, the business has grown significantly in this period.

Key customer sectors are automotive, consumer and industrial automation where inYantra has built strong customer relations with a number of Indian and international blue-chip original equipment manufacturers and Tier 1 suppliers.  inYantra has delivered exciting growth despite the global challenges of Covid-19 with revenues increasing from US$10.7 million in the year to 31 March 2020 to an expected c.$22.0 million in the year to 31 March 2022.

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About Volex

Volex plc (AIM:VLX) is a global leader in integrated manufacturing for performance-critical applications and a supplier of power products. We serve a diverse range of markets and customers, with particular expertise in cable assemblies, higher-level assemblies, data centre power and connectivity, electric vehicles, and consumer electricals. We are headquartered in the UK and operate from 20 manufacturing locations with a global workforce of over 6,900 employees across 22 countries. Our products are sold through our own locally based sales teams and through authorised distributor partners to Original Equipment Manufacturers ('OEMs') and Electronic Manufacturing Services ('EMS') companies worldwide. All of the products and services that we offer are integral to the increasingly complex digital world in which we live, providing power and connectivity from the most common household items to the most complex medical equipment. For more information, please visit www.volex.com 

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