REG - SDI Group PLC - Acquisition of Peak Sensors

SDIAnnouncement

06/11/2023 07:00

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RNS Number : 4066S  SDI Group PLC  06 November 2023

SDI Group plc

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

(AIM: SDI)

 

Acquisition of Peak Sensors

 

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 3 November
2023 of Peak Sensors Holdings Limited ("Peak Sensors" or "Peak"), a UK
manufacturer of temperature sensors (the "Acquisition"). Total consideration
is forecast to be approximately £2.4m.

 

Highlights:

·          Peak Sensors is a leading UK manufacturer of temperature
sensors, specialising in standard and bespoke thermocouples and resistance
thermometers which are used in various industries, including glass, ceramic,
incinerators (including energy from waste), cement, and ovens.

·          Peak is based in Chesterfield with a 5,300 sq ft
leasehold facility, and has approximately 14 employees.

·          Revenues for the year ended 31 March 2023 were £2.1m,
with EBIT of c.£330,000.

·          Peak will join the Group's Sensors and Controls division.

·          Acquisition is expected to be earnings enhancing in the
first full year of ownership.

 

Ken Ford, Chairman of SDI said: "The acquisition of Peak 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 the first full year of
ownership. We are delighted to welcome Roshan Aucklah, Peter Smith and their
staff at Peak 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)

 

Cavendish Capital Markets
Limited
020 7220 0500

Ed Frisby/Seamus Fricker- 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, plastics and packaging, manufacturing, precision
optics, measurement instrumentation and art conservation. SDI operates through
its subsidiaries: 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, Fraser Anti-Static Techniques and Peak Sensors.

 

Corporate expansion is via organic growth within its subsidiary companies and
through the acquisition of complementary, niche technology businesses with
established reputations in global markets.

 

 

 

 

 

The following information is disclosed in relation to the Acquisition.

 

About Peak Sensors

 

Peak Sensors comprises three companies: Peak Sensors Holdings Limited and two
wholly owned subsidiaries, Peak Sensors Limited and Peak Sensors (Property)
Limited. Peak Sensors Limited is the main trading company in the Group,
employing all members of staff.

 

Peak Sensors is a leading UK manufacturer of temperature sensors, specialising
in standard and bespoke thermocouples and resistance thermometers. With over
25 years of experience, the company serves various industries, including
glass, ceramic, incinerators (including energy from waste), cement, and ovens.
Peak exports to more than 85 countries in 6 continents, with approximately 17%
overseas sales.

 

For the year ended 31 March 2023, Peak Sensors achieved revenues of
approximately £2.1m, EBIT of c.£330,000, and the Group's statutory profit
before tax was c.£367,000 (all consolidated, unaudited).

 

Peak Sensors operates from a single site in Chesterfield. Roshan Aucklah, CEO
since 2017, will stay on to lead the business under SDI Group ownership. Peter
Smith, one of the founders of the business, will stay on as a consultant. Peak
has approximately 14 employees.

 

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. Peak will join SDI's Sensors and Controls division. The SDI Board
considers that there are long term growth drivers for Peak's products and
services internationally.

 

Consideration for the Acquisition

 

Total consideration is estimated at £2.4m and consists of:

 

·          Initial cash consideration on completion of £1.58m; and

·          A balancing payment in cash shortly after completion,
expected to be approximately £0.82m, which is dependent on the total
consolidated net assets of Peak Sensors Holdings Limited at completion. The
acquired net assets are expected to include a small cash balance being Peak's
ongoing cash working capital.

 

The cash consideration will be funded from the Group's revolving credit
facility with HSBC UK Bank. As at 30 September 2023, the Group had cash of
approximately £1.8m (unaudited), bank debt of £15.1m (unaudited) and £9.9m
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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