REG - SDI Group PLC - Acquisition of SVS and Atik Order

SDIAnnouncement

07/01/2022 07:00

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RNS Number : 7088X  SDI Group PLC  07 January 2022

SDI Group plc

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

(AIM: SDI)

 

Acquisition of Scientific Vacuum Systems Ltd and

Further Atik Cameras Order

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
control applications, is pleased to announce the acquisition on 05 January
2022 of Scientific Vacuum Systems Ltd ("SVS"), a UK manufacturer of physical
vapour deposition equipment (the "Acquisition"). Total consideration,
including earnout, is forecast to be approximately £4.9 million, net of cash
acquired.

 

Highlights:

 

 •    SVS specialises in custom Physical Vapour Deposition (PVD) systems for the
      deposition of thin film coatings typically on semiconductor wafers, for use in
      scientific research, industrial and semiconductor manufacturing applications
 •    SVS are market leaders in the manufacture of production sputter coaters for
      premium brand razor blade coating
 •            Revenues for the year to September 2021 were approximately £2.5m
      and EBIT of £0.7 million
 •    Acquisition expected to be immediately earnings enhancing

 

 

Ken Ford, Chairman of SDI said: "The acquisition of SVS is a further step in
our Group growth strategy and will reside within our Sensors and Controls
division. The Acquisition is expected to be immediately earnings enhancing. We
are delighted to welcome Terry Shimell, Philip Eames and their highly
technical staff to the SDI Group."

 

 

Further Atik Cameras Order

 

The Company also announces that its Atik Cameras division has received a
further firm order for cameras to be used in PCR machines, for delivery in the
year ending 30 April 2023, extending the series of orders related to the
COVID-19 pandemic.

 

 

Enquiries

SDI Group
plc                                                                                                  01223
320480

Ken Ford, Chairman

Mike Creedon, CEO

Jon Abell, CFO

www.thesdigroup.net (http://www.scientificdigitalimaging.com)

 

finnCap
Ltd
                              020 7220 0500

Ed Frisby/Kate Bannatyne/Milesh Hindocha - Corporate Finance

Andrew Burdis/Sunila de Silva - ECM

 

JW
Communications
07818 430877

Julia Wilson - Investor & Public Relations

About SDI Group plc:

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
and Scientific Vacuum Systems.

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. www.thesdigroup.net (http://www.thesdigroup.net)
 

 

 

The following information is in relation to the Acquisition

 

About Scientific Vacuum Systems Ltd

 

SVS specialises in the design, manufacture and service of bespoke and standard
PVD and other vacuum related systems, which typically produce nano/micron thin
films by sputtering or electron beam evaporation onto the surface of a
substrate under controlled vacuum conditions.

 

Applications for such systems have included large scientific experiments,
semiconductor manufacturing, nuclear installation, electronic component
manufacture, and premium brand razor blade manufacture where SVS enjoys good
relationships with leading manufacturers.

 

Additional products include Ion Beam Milling systems used in semiconductor
manufacturing and experimental photovoltaic absorber layer deposition
equipment for solar panel manufacture. SVS typically produces a handful of
high value systems each year in addition to steady revenue from parts,
consumables and service.

 

For the year ended 30 September 2021, SVS achieved revenues of £2.5 million,
and EBIT of £0.7 million (unaudited).

 

Based in Finchampstead, Berkshire, Scientific Vacuum Systems Ltd was founded
in 1990 by Terry Shimell and Philip Eames and employs approximately 8 staff.
Terry and Philip will continue to lead the company within the SDI Group.

 

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 SDI Board considers that there are long term growth drivers for
SVS's products and services.

Consideration for the Acquisition

 

Total consideration is estimated at £4.9 million, excluding cash acquired,
and consists of:

 •    Initial consideration of £3.17 million paid in cash;
 •    A payment in cash shortly after completion, equivalent to the net tangible
      assets of SVS at completion, currently estimated at £1.4 million and which
      net tangible assets are estimated to include c.£0.6 million of cash and no
      bank debt (subject to completion accounts); and
 •    An earnout cash payment, payable after 30 September 2022, currently estimated
      at £0.9 million and dependent on the EBIT performance of SVS in the year to
      30 September 2022.

 

The total consideration is capped at £5.5 million (including estimated £0.6
million of cash acquired), and this would be payable based on Scientific
Vacuum Systems achieving adjusted EBIT for the year to 30 September 2022 in
excess of £1.1 million.

The cash consideration will be funded from existing cash resources and from
the Group's revolving credit facility with HSBC UK Bank. As at 31 December
2021, the Group had cash of approximately £7.3 million (unaudited), bank debt
of £3.0 million (unaudited), and £17.0 million of undrawn bank facility.

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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