REG - SDI Group PLC - Acquisition of InspecVision

SDIAnnouncement

30/10/2024 07:00

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RNS Number : 1975K  SDI Group PLC  30 October 2024

SDI Group plc

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

 

Acquisition of InspecVision

 

 

30 October 2024 - SDI Group plc (https://sdigroup.com/) , the buy and build
group, focused on companies which design and manufacture specialist lab
equipment, industrial & scientific sensors and industrial & scientific
products, is pleased to announce the acquisition of InspecVision Ltd
("InspecVision"), a designer and manufacturer of computer vision-based
measurement systems for industrial applications, for a net consideration of
£6.1m.

 

Highlights

·      Profitable business in the metrology market

·      Blue chip customer base, international revenues and strong US
market exposure

·      Provides intra-group cross selling opportunities

·      Delivering against Group's stated acquisition strategy

·      InspecVision will join the Group's Industrial & Scientific
Products division

·      Acquisition is expected to be immediately earnings enhancing(1)

 

InspecVision provides precision measurement machinery for smart manufacturing,
automated inspection and reverse engineering and offers the Group an entrance
into the high value metrology market and a global, blue chip customer base
which includes the US. InspecVison introduces new technological capabilities
to the Group, including AI and machine learning, and has strong IP, which can
be leveraged.

 

For the year ended 31 December 2023, InspecVision delivered revenue of £3.2m,
adjusted EBIT of £0.84m (adjusted to reflect InspecVision's cost base as part
of the Group) and a reported EBIT of £0.95m (all unaudited).

 

Stephen Brown, CEO of SDI Group, said:

"InspecVision is a high-quality, profitable business which fulfils our key
investment criteria of trading in a growth sector, with international exposure
and a strong management team. The acquisition presents a rare opportunity to
buy such a good business poised to capitalise on future growth in the
metrology market.

 

Its US market presence also provides a platform to deliver additional value to
other Group portfolio companies, particularly through cross-selling synergies
and opening up new routes to market. We are excited by the prospects for this
acquisition and continue to pursue our acquisitive growth strategy alongside
our organic growth programme."

 

About InspecVision

InspecVision was established in March 2003 to develop a range of precision
inspection machines for industrial applications. Founder, Dr. Jan Antonis,
carried out advanced research in computer vision systems at Queen's University
Belfast and identified a gap in the market for a system which could measure
parts quickly and easily. Sales of the Planar inspection system, for quality
control and reverse engineering applications, began in 2005. InspecVision
products are now sold in over 30 countries worldwide. It employs 14 people and
is based in a 20,400 sq ft. site in Newtonabbey, Northern Ireland. The
majority shareholders of the business, prior to this acquisition, were Dr Jan
Antonis, Mike Antonis and Colette Johnston. Dr Jan Antonis and Colette
Johnston will remain with the business in a full-time capacity.

 

Consideration for the Acquisition

Net consideration is £6.1m. Total consideration is £8.65m and consists of:

 * Cash consideration payable shortly following completion of £7.9m, which
includes £1.8m of acquired cash; and

 * An additional cash consideration of £0.75m in relation to leasehold property
owned by InspecVision which will immediately following completion be sold back
to the sellers for £0.75m on a sale and leaseback arrangement.

 

The cash consideration will be funded from the Group's revolving credit
facility with HSBC UK Bank. As at 30 September 2024, the Group had cash of
approximately £1.1m (unaudited), bank debt of £12.6m (unaudited) and £12.4m
of undrawn bank facility (excluding the accordion option).

 

(1)Analysts from SDI's broker Cavendish Capital Markets Limited, and from
Progressive Equity Research regularly provide research on the Company,
accessible from SDI's website, and the Group considers the average of their
forecasts to represent market expectations which for FY25 were, prior to
announcement of this acquisition, Sales of £69.0m and Adjusted Profit Before
Tax of £8.35m.

 

 

 

 Enquiries:

 SDI Group plc                                        +44 (0)1223 727144

 Stephen Brown, Chief Executive Officer               www.sdigroup.com (http://www.sdigroup.com)

 Amitabh Sharma, Chief Financial Officer

 Cavendish Capital Markets Ltd (NOMAD & broker)       +44 (0)20 7220 0500

 Ed Frisby / Seamus Fricker - Corporate Finance

 Andrew Burdis / Sunila de Silva - ECM

 Vigo Consulting (Financial Communications)           +44 (0)20 7390 0230

 Tim McCall / Rozi Morris / Fiona Hetherington        SDIGroup@vigoconsulting.com (mailto:SDIGroup@vigoconsulting.com)

 

About SDI Group plc

 

SDI Group plc is a group of small to medium size companies with specialist
industrial and scientific products in growth sector niches which help solve
customers' key challenges.

 

It specialises in the acquisition and development of companies that design and
manufacture specialist products for use in lab equipment, industrial &
scientific sensors and industrial & scientific products.

 

Its portfolio of businesses supplies the life sciences, healthcare, plastics
and packaging, manufacturing, precision optics and measurement instrumentation
markets.

 

SDI aims to continue its growth through driving the organic growth of its
portfolio companies and by the acquisition of complementary technology
businesses with established reputations in global markets.

 

For more information, please see: www.SDIGroup.com (http://www.SDIGroup.com)

 

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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