REG - Flowtech Fluidpower - FLOWTECH EXPANDS ITS FOOTPRINT IN EUROPE <Origin Href="QuoteRef">FLOL.L</Origin>

Flowtech FluidpowerAnnouncement

07/09/2017 15:40

RNS Number : 1529Q
Flowtech Fluidpower PLC
07 September 2017
NEWS RELEASE
Issued on behalf of Flowtech Fluidpower PLC
Immediate Release
FLOWTECH FLUIDPOWER PLC
("Flowtech," the "Group" or "Company")
Flowtech expands its footprint in Europe through the Acquisition of The Hydraulic Group B.V. Benelux
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 c0.6m. 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.
Note: 
The majority of the consideration to be paid in Euros. The above values have been converted at an exchange rate of 1.09 /GBP
Enquiries:
Flowtech Fluidpower plc
Sean Fennon, Chief Executive
Bryce Brooks, Chief Financial Officer
Tel: +44 (0) 1695 52796
Email: info@flowtechfluidpower.com
Zeus Capital Limited (Nominated Adviser and Broker)
Andrew Jones, Alistair Donnelly (corporate finance)
Dominic King, John Goold (sales & broking)
Tel: +44 (0) 203 829 5000
finnCap Limited (Joint Broker)
Ed Frisby, Kate Bannatyne (corporate finance)
Rhys Williams, Emily Morris (sales & broking)
Tel: +44 (0) 20 7220 0500 
TooleyStreet Communications (IR and media relations)
Fiona Tooley
Tel: +44 (0) 7785 703523 or email: fiona@tooleystreet.com
EDITORS NOTES
About Hydroflex Group:
Hydroflex is a supplier and stockholder of hydraulic components covering industrial hydraulic steering components, high pressure hoses, hose assemblies and related products. Supplying worldwide, the business is recognised for providing total solutions to its global customers exploiting its technical skills within its central warehouse based in Oud-Beijerland, where the stockholding covers some 30,000 items, through to its offices in Rotterdam and Brussels. Orders can be placed by telephone, e-mail 24/7 using a bespoke scan2order system. Specific core markets include shipbuilding, general engineering, oil and gas, offshore and petrochemicals and it has some presence within both the OEM and MRO markets.
For more information please visit www.hydroflex.nl
About Flowtech Fluidpower plc
Founded as Flowtech in 1983, the Flowtech Group is the UK's leading specialist supplier of technical fluid power products. The business joined AiM in 2014. Today, the business has three distinct divisions: 
Division:
What we do:
Locations:
Flowtechnology
focus on supplying distributors and resellers of industrial MRO products, primarily serving urgent orders rather than bulk offerings. It offers an unrivalled range of OEM and Exclusive Brand products to over 3,400 distributors and resellers. The catalogue is recognised as the definitive source for fluid power products, containing 100,000 individual product lines and are distributed to more than 80,000 industrial MRO end users.
Flowtechnology Benelux (Deventer)
Flowtechnology China (Guangzhou)
Flowtechnology UK (Skelmersdale)
Indequip (Skelmersdale)
Power Motion Control (PMC)
Specialise in the design, assembly and supply of engineering components and hydraulic systems and is further enhanced by a service and repair function,
Primary Fluid Power (Knowsley)
Nelson Fluid Power- (Dublin, Lisburn, Dungannon)
TSL Fluidpower (West Yorkshire)
Albroco (Knowsley)
Hydraulics & Transmissions (Ludlow)
HiPower Hydraulics (Cork, Dublin, Belfast Manchester)
Hydroflex Hydraulics (Brussels, Rotterdam and OudBeijerland)
Process
focus on the supply of industrial components and solutions to the process sectors.
Hydravalve, (Willenhall)
Orange County (Spennymoor)
All three of the Group's divisions have overlapping product sets, allowing procurement synergies to be maximised 
The divisions are supported by a centralised back office team at the Skelmersdale site and a procurement and quality control team in Shanghai. In total, the business employs over 400 people. For more information please visit, www.flowtechfluidpower.com
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under 
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, 
this inside information is now considered to be in the public domain.

This information is provided by RNS
The company news service from the London Stock Exchange
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