REG - discoverIE Group plc - Acquisition of Burster

DiscoverieAnnouncement

16/01/2025 07:00

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RNS Number : 5102T  discoverIE Group plc  16 January 2025

7.00am, 16 January 2025

 

discoverIE Group plc

 

Acquisition of Burster

 

discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a leading
international designer and manufacturer of customised electronics to industry,
today announces the acquisition of the Burster Group ("Burster"), a
German-based designer and manufacturer of specialist sensors, for an initial
cash consideration of €30.6m (£25.9m) on a debt free, cash free basis,
before expenses, which will be funded from the Group's existing debt
facilities. In addition, an earn-out of up to €12.4m (£10.5m) will be
payable subject to Burster achieving certain financial performance conditions
in its year ending 31 December 2025.

 

Founded in 1961, Burster produces specialist sensors including precision load
cells, torque sensors, displacement and pressure sensors, and electronic
measurement instruments for markets closely aligned with the Group's target
markets. It benefits from a low customer concentration and sells into c.60
countries. International markets make up c.40% of sales, notably the rest of
Europe, Asia and North America.

 

Burster, under its existing ongoing management, will join the Group's Sensing
cluster within the Sensing & Connectivity division. Retaining its distinct
brand identity, the business will benefit from access to the Group's broad
customer base and the cluster's specialist international sensor sales,
production and engineering capabilities, with a view to expanding both
international and domestic sales. The Sensing cluster, which includes six
other businesses, is a leading platform in the long-term growth, high
performance, custom sensing market, which is driven by application areas such
as the Industrial Internet of Things (IIoT), medical equipment, robotics and
artificial intelligence (AI).

 

Burster has a strong track record, with unaudited revenues for the year ended
31 December 2024 of c.€18m (£15m), and an underlying operating profit
margin that is above discoverIE's medium-term target of 15%.

 

This acquisition will be accretive to underlying earnings and underlying
operating margin from 1 April 2025. Following this acquisition, the Group's
consensus gearing(1) at 31 March 2025 increases from 1.25x to 1.6x, well
within the Group's target range of 1.5x to 2x. The pipeline of acquisition
opportunities in development remains strong.

 

Nick Jefferies, Group Chief Executive of discoverIE plc, said:

 

"The Group entered the second half with c.£70m of capacity for acquisitions
and the acquisition of Burster continues our strategy of building a
differentiated, international, growth-focused electronics group with stronger
operating margins. The transaction brings another high-quality business into
discoverIE with strong alignment to our target markets, which is accretive to
both underlying earnings and Group margin.

 

Burster has an excellent portfolio that is highly complementary to our
existing product suite and is a great addition to our sensor cluster. We
warmly welcome the Burster team into the discoverIE Group and look forward to
working with them."

 

Matthias Burster, Managing Director of Burster, said:

 

"Burster is excited to join the discoverIE Group to lead the business into the
future while building on its strong heritage and reputation in the
marketplace. Our commitment to customers and the delivery of cutting-edge
sensor technology, automation measuring electronics and over 60 years of
experience in the field of precision measuring and calibration equipment under
the Burster brand remains unchanged. discoverIE's sensor cluster opens up many
new opportunities for international growth. discoverIE's dedication to its
portfolio companies is exceptional, and we look forward to our next chapter."

 

For further information please contact:

discoverIE Group
plc
            01483 544 500

Nick Jefferies                Group Chief Executive

Simon Gibbins              Group Finance Director

Lili Huang                      Head of Investor Relations

 

Burson
Buchanan
020 7466 5000

Chris Lane, Toto Berger, Jack Devoy

discoverIE@buchanan.uk.com

 

Notes

 

1.     Gearing ratio is defined as net debt divided by underlying EBITDA
(annualised for acquisitions, excluding IFRS16). Gearing reported at 30
September 2024 was 1.45x with consensus gearing at 31 March 2025 of 1.25x.

 

2.     The information contained within this announcement is deemed by the
Group to constitute inside information as stipulated under the Market Abuse
Regulation, Article 7 of EU Regulation 596/2014. Upon the publication of this
announcement via Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

 

Notes to Editors:

 

About discoverIE Group plc

 

discoverIE Group plc is an international group of businesses that design and
manufacture innovative electronic components for industrial applications.

 

The Group provides application-specific components to original equipment
manufacturers ("OEMs") internationally through its two divisions, Magnetics
& Controls, and Sensing & Connectivity. By designing components that
meet customers' unique requirements, which are then manufactured and supplied
throughout the life of their production, a high level of repeating revenue is
generated with long-term, high quality customer relationships.

 

With a focus on key markets driven by structural growth, increasing electronic
content and sustainability, namely medical, electrification of transportation,
renewable energy, security and industrial automation & connectivity, the
Group aims to achieve organic growth that is well ahead of GDP and to
supplement that with complementary acquisitions. The Group is committed to
reducing the impact of its operations on the environment in order to reach net
zero. With its key markets aligned with a sustainable future, the Group has
been awarded an ESG "AA" rating by MSCI and is Regional (Europe) Top Rated by
Sustainalytics.

 

The Group employs c.4,500 people across 20 countries with its principal
operating units located in Continental Europe, the UK, China, Sri Lanka, India
and North America.

 

discoverIE is listed on the Main Market of the London Stock Exchange and is a
member of the FTSE 250, classified within the Electrical Components and
Equipment subsector.

 

 

 

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