Sale of Telecoms Antenna Business

19 December 2019

Filtronic plc

("Filtronic" or "the Company")

SALE OF TELECOMS ANTENNA BUSINESS

Filtronic plc ("the Company") (AIM: FTC), the designer and manufacturer of antennas, filters and mmWave products for the wireless telecoms and critical communications markets is pleased to announce that an agreement has today been signed for the sale of its Telecoms Antenna Operations to Microdata Telecom Innovation Stockholm AB ("Microdata Telecom").

The sale will complete on 2 January 2020 for an initial cash consideration of $5.5m (c£4.2m) on a cash free-debt free basis with a further potential deferred consideration whereby Filtronic will take an equal share  of the gross profit that outperforms the mutually agreed gross profit targets of $2.0m and $3.0m for the Telecoms Antenna Operation over the next two calendar years respectively. There are no closing conditions and no requirements for regulatory approval.

The Company announced its intention to sell its Telecoms Antenna Operations in September 2019 following a strategic review. The sale comprises the entire share capital of Filtronic Wireless AB in Sweden and certain antenna manufacturing assets held by our Chinese subsidiary. Net assets held for sale at 31 May 2019 were £2.8m, whilst the operating loss before exceptional items in the year ending 31 May 2019 was £1.9m. Microdata Telecom have a transitional 12 month restricted right to use the Filtronic Wireless brand in relation to the sale of antennas until Microdata Telecom can rebrand the Company.

This sale represents an important step forward for Filtronic and the sale proceeds will be used to further develop and grow our continuing businesses comprising 5G / X-Haul, public safety communications and defence & aerospace, all areas where we see continued long term potential to exploit our core strengths. 

Over the first half of the current financial year, we have made substantial investments in our manufacturing and engineering capacity and capability in order to capitalise on a strong and extended order book and further market opportunities. The proceeds from the sale will enable us to continue our investment programme and provide the resources to invest in new opportunities in our core growth markets where we can differentiate ourselves.

Reg Gott, Executive Chairman, said "I am delighted to confirm that we have signed an agreement with Microdata Telecom to purchase our Telecoms Antenna Operations. The sale strengthens our balance sheet, simplifies our business, and enables us to focus on business activities that better suit our core strengths. Microdata Telecom is an ambitious and rapidly growing company with a strong wireless telecoms pedigree. Being based in Taby, Sweden, it is well known to our Telecoms Antenna Operations and is an excellent destination for our staff, customers and products."

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