London: Thursday, 7 September 2017: AiM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: AiM: symbol: FLO) is pleased to announce the further strengthening of its Power Motion Control (PMC) division through the acquisition of The Hydraulic Group B.V., including its main trading operation, Hydroflex Hydraulics ("Hydroflex"), a distributor of hydraulic equipment and components, predominantly to the mechanical engineering, marine and agricultural sectors. The business is headquartered in Rotterdam, and has a sales presence in Brussels; it also complements the Group's existing Flowtechnology operation in the Netherlands. Hydroflex was founded 50 years ago and holds several long-term customer relationships through its operations in the Netherlands and Belgium. The business employs 42 people in total. The acquisition provides another complementary business to the Group's PMC division, delivering incremental revenue through a wider geographical channel and extends Flowtech's position with important European suppliers, and in particular, Eaton Corporation. Hydroflex will operate as an independent sister company within the PMC division and will continue to be managed by the previous owner and Managing Director, Leo Voogd, who has been with the business for over 20 years. For the year ended 31 December 2016, Hydroflex achieved sales of £6.7 million producing EBIT of £0.4 million. Net assets excluding net debt at the same date were £1.1 million. The Group expects to deliver synergy opportunities over the short and medium term through coordinated procurement and back office activities, as well as wider commercial opportunities through collaboration with the Flowtechnology Benelux operation, and the PMC division in general. The new business will also act as a "springboard" for further complementary acquisition activity in the Benelux region. The consideration of approximately £2.8 million is to be satisfied as to c.£2.1 million in cash on completion, and the balance of c.£0.7 million by the allotment of 495,179 new ordinary shares in Flowtech (the "Consideration Shares"). to Leo Voogd. In addition, an option over 330,119 shares is to be issued with an exercise price of 138.7 pence. The Group will also assume the net debt position of Hydroflex at completion, which is expected to be c£0.6m. The maximum total consideration, including assumed debt, following any completion accounting adjustments is c.£3.7 million. The Consideration Shares have been credited as fully paid and will rank pari passu in all respects with the existing ordinary shares in the capital of the Company in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the shares. Application has been made for the Consideration Shares to be admitted to trading on AIM and it is expected that admission will become effective and that dealings will occur on or around 13 September 2017 ("Admission"). On Admission, the Company's issued share capital will consist of 52,157,195 ordinary shares. There are no ordinary shares held in treasury. Therefore, in accordance with the FCA's Disclosure and Transparency Rule 5.6.1, the Company confirms that following Admission, the total number of voting rights (TVR) in the Company will be 52,157,195. Sean Fennon, Chief Executive, Flowtech Fluidpower plc commented: "As a Board, we are delighted to add this successful business to the Group's portfolio. We have, as stakeholders know, wished to enhance our European presence and this opportunity represents the first move internationally for our PMC business. Having got to know that Hydroflex's culture, model and aspirations near mirrors that of our own, the new skills, customers and end markets introduced will further strengthen Flowtech's profile, product offering and technical expertise; this will serve us well as we continue to roll-out our strategy of building the leading fluid power group" Leo Voogd, Managing Director of The Hydraulic Group B.V. added: "The opportunity to be involved with the exciting developments of the Flowtech strategy in our region was hugely influential in my decision to sell the business. There are great synergies and this move considerably enhances several aspects of our Benelux business and offers new and exciting prospects for all our employees. My team and I are looking forward to working as part of this industry respected business - we recognise that the strategy and the resources now open to us make it possible to achieve significant growth beyond what was achievable as an independent business." In summary, the Board of Flowtech remain very encouraged about the future. The Group will be releasing its Half Year results for the period ended June 2017 on, Tuesday 12 September. |
