REG - SDI Group PLC - Acquisition of Fraser Anti-Static Techniques Ltd

SDIAnnouncement

24/10/2022 07:00

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RNS Number : 7850D  SDI Group PLC  24 October 2022

SDI Group plc

("SDI", "SDI Group", the "Company" or the "Group")

(AIM: SDI)

 

Acquisition of Fraser Anti-Static Techniques Limited

SDI Group plc, the AIM quoted Group focused on the design and manufacture of
scientific and technology products for use in digital imaging and sensing and
control applications, is pleased to announce the acquisition on 21 October
2022 of Fraser Anti-Static Techniques Limited ("Fraser"), a UK manufacturer of
anti-static equipment (the "Acquisition"). Total consideration is forecast to
be approximately £13.0m, net of excess cash acquired.

 

Highlights:

 ●    Fraser is a leading UK manufacturer of anti-static products which eliminate,
      clean, generate or measure static electricity in a variety of industries
      including plastics, packaging, printing, food processing, medical and pharma
      amongst others.
 ●    Fraser operates across three freehold sites in Bampton, Devon and one
      leasehold site in Bristol, covering in total 24,500 sq ft and has
      approximately 47 employees. It also has sales offices in China and Germany. A
      large proportion of Fraser's revenues are to overseas customers.
 ●    Revenues for the year ended 30 November 2021 were £7.4m, with adjusted EBIT
      of £1.6m.
 ●    Acquisition price includes c. £1.76m of freehold property.
 ●    Fraser will reside in the Group's Sensors and Controls division.
 ●    Acquisition expected to be enhancing in the current year.

 

Ken Ford, Chairman of SDI said: "The acquisition of Fraser is a further step
in our Group growth strategy, demonstrating again the opportunities to acquire
businesses with high quality products with export growth potential. The
Acquisition is expected to be earnings enhancing in current year FY2023. We
are delighted to welcome Bob Fraser, Bruce Clothier and their staff at Fraser
to the SDI Group."

 

 

FURTHER INFORMATION ON THE ACQUISITION IS SET OUT BELOW

 

 

 Enquiries
 SDI Group plc                                                 01223 727144
 Ken Ford, Chairman
 Mike Creedon, CEO
 Ami Sharma, CFO
 www.sdigroup.com (http://www.sdigroup.com)

 finnCap Ltd                                                   020 7220 0500
 Ed Frisby/Seamus Fricker/Milesh Hindocha - Corporate Finance
 Andrew Burdis/Sunila de Silva - ECM

 

SDI designs and manufactures scientific and technology products for use in
digital imaging and sensing and control applications including life sciences,
healthcare, astronomy, manufacturing, precision optics and art conservation.
SDI operates through its company divisions: Atik Cameras, Synoptics,
Graticules Optics, Sentek, Astles Control Systems, Applied Thermal Control,
MPB Industries, Chell Instruments, Monmouth Scientific, Uniform Engineering,
Scientific Vacuum Systems, Safelab Systems, LTE Scientific and Fraser
Anti-Static Techniques.

 

SDI continues to grow by developing its own technology advancements and by
improving its global sales channels, as well as through pursuing strategic,
complementary acquisitions.

 

 

 

The following information is disclosed in relation to the Acquisition

 

About Fraser Anti-Static Techniques Limited

 

Fraser Anti-Static Techniques Limited specialises in the manufacture of
anti-static products which eliminate, clean, generate or measure static
electricity in a variety of industries including plastics, packaging,
printing, food processing, medical, pharma, automotive and electronics.

 

Fraser's products fall into two technology categories: advanced 24V DC
technology products and conventional AC static eliminators. Fraser is
considered to be a pioneer in 24V designs with integrated high voltage
generation. The Company delivers most of its products globally and is
considered to be one of the top ten suppliers of anti-static products.

 

For the year ended 30 November 2021, Fraser achieved revenues of approximately
£7.4m, adjusted EBIT of £1.6m (adjusted to reflect Fraser's ongoing cost
base with the Group) and statutory profit before tax of £1.87m (unaudited).

 

Fraser operates from three units in Bampton, Devon and an R&D site in
Bristol. The Company also has sales offices in Shanghai, China and Dresden,
Germany. Bruce Clothier, who has been CEO for the last seven years, will stay
on to lead the business under SDI Group ownership. Bob Fraser, who founded the
business in 1991, will stay on as a consultant. Fraser has approximately 47
staff.

 

Acquisition rationale

 

The Acquisition is in line with the Group's strategy of acquiring businesses
with complementary scientific and technology products, with capable management
teams in place and with opportunities to grow further under the SDI Group
structure. The Company is a strong exporter within its niche manufacturing
sector. Fraser will reside within SDI's Sensors and Controls division. The SDI
Board considers that there are long term growth drivers for Fraser's products
and services internationally.

Consideration for the Acquisition

 

Total consideration is estimated at £16.9m, including approximately £3.9m
excess cash acquired, and consists of:

 ●    Initial consideration of £15.4m (including approximately £3.4m of excess
      cash), representing a net £12.0m payable in cash at completion; and
 ●    A balancing payment in cash shortly after completion, expected to be
      approximately £1.5m (including £0.5m of excess cash), which is dependent on
      the net assets of Fraser delivered at completion. The net assets include
      freehold ownership of Fraser's three manufacturing units, valued at
      approximately £1.76m.

 

The cash consideration will be funded from existing cash resources and from
the Group's revolving credit facility with HSBC UK Bank. As at 30 September
2022, the Group had cash of approximately £3.3m (unaudited), bank debt of
£7.0m (unaudited) and £13.0m of undrawn bank facility (excluding accordion).

No statement in this announcement is intended to be a profit forecast or
estimate and no statement in this announcement should be interpreted to mean
that earnings per share of the Company for the current or future financial
years would necessarily match or exceed the historical published earnings per
share of the Company.

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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