REG - Volex PLC - Acquisition of majority stake in inYantra

VolexAnnouncement

07/03/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220307:nRSG7744Da&default-theme=true

RNS Number : 7744D  Volex PLC  07 March 2022

7 March 2022

Volex plc

("Volex" or the "Company")

Acquisition of a majority stake in inYantra Technologies Pvt Ltd and property
purchase for combined consideration of $13.0 million

Volex plc (AIM:VLX), the global supplier of integrated manufacturing services
and power products, is pleased to announce a 51% majority equity investment in
inYantra Technologies Pvt Ltd ("inYantra") for $8.0 million (the "Equity
Investment") and the purchase of 13.5 acres of industrial land, which includes
3.5 acres of land and the operational buildings used by inYantra, in Pune,
India (the "Property Purchase") for $5.0 million.  The Equity Investment and
Property Purchase consideration, totaling $13.0 million, will be satisfied in
cash on completion from the Company's existing debt facilities. The Equity
Investment and the Property Purchase are expected to complete in the next few
weeks.

Strategic Rationale

-      inYantra has expertise in printed circuit board assembly and box
build integrated solutions, operating from a dedicated manufacturing site.
It has established customer relationships and over 500 employees, led by an
entrepreneurial management team

-      Pune, India, is a hub for advanced manufacturing and the location
of one of Volex's largest medical customers.  The Equity Investment creates
substantial additional opportunities with this customer, as well as providing
further growth potential from the domestic and export market

-      The Equity Investment enables a strong combined cross-sell
proposition to mid-volume industrial customers in the region

-      The Equity Investment strengthens Volex's ability to provide
flexibility and choice to its global customer base in the provision of its
vertically integrated solutions, by adding a new manufacturing region to its
unique international operating footprint

-      Supporting this strong growth potential, the Property Purchase
will allow for an expansion in the range of capabilities the site can offer
following the construction of a new 100,000 square foot Medical and Complex
Industrial Technology cable assembly facility, with the scope for further
development to support expansion in Volex's other segments including consumer
electrical and electric vehicles

Transaction Highlights

-      For the year ending 31 March 2022, inYantra is expected to
generate revenues of approximately $22.0 million and EBITDA of approximately
$1.6 million across consumer electrical and industrial markets

-      The existing management team has delivered compound annual revenue
growth of 38% in the last five years and will remain in place to deliver a
joint business plan focused on further growth

Nat Rothschild, Executive Chairman of Volex, commented:

"This transaction offers an excellent strategic opportunity to expand our
global footprint, which is consistent with our strategy, and will bring new
and strengthened capabilities in the key Indian market.  inYantra's existing
business, along with the imminent development of a complex cable assembly
capability, will improve our customer offering, supporting low-cost
manufacturing for existing and new domestic and export customers. Volex sees a
further opportunity to improve inYantra's margins by allowing inYantra to
leverage the economies of scale from being part of a larger group."

About inYantra

inYantra specialises in the assembly of printed circuit boards and box
builds.  It operates from a single site in Pune, Maharashtra, India, with
around 500 employees and occupies approximately 3.5 acres of the 13.5 acres
site being acquired via the Property Purchase. The business was founded in
2002 and acquired by Pravin Jain of Sonoma Management Partners (SMP) in 2011.
Since the involvement of SMP, the business has broadened its customer base,
installed three state of the art high speed surface mount technology lines and
added numerous industry and quality accreditations. Under the stewardship of
an experienced management team, the business has grown significantly in this
period.

Key customer sectors are automotive, consumer and industrial automation where
inYantra has built strong customer relations with a number of Indian and
international blue-chip original equipment manufacturers and Tier 1
suppliers.  inYantra has delivered exciting growth despite the global
challenges of Covid-19 with revenues increasing from US$10.7 million in the
year to 31 March 2020 to an expected c.$22.0 million in the year to 31 March
2022.

For further information please contact:

 Volex plc                                                           +44 (0)7971 156 431
 Nat Rothschild, Executive Chairman
 Jon Boaden, Chief Financial Officer
 Julian Wais, Head of Investor Relations
 investor.relations@volex.com (mailto:investor.relations@volex.com)

 Singer Capital Markets - Nominated Adviser & Joint Broker           +44 (0)20 7496 3000
 Shaun Dobson / George Tzimas

 HSBC Bank plc - Joint Broker                                        +44 (0)20 7991 8888
 Simon Alexander / Joe Weaving

 Powerscourt - Media Enquiries                                       +44 (0)20 7250 1446
 James White / Maxim Hibbs

 

About Volex

 

Volex plc (AIM:VLX) is a global leader in integrated manufacturing for
performance-critical applications and a supplier of power products. We serve a
diverse range of markets and customers, with particular expertise in cable
assemblies, higher-level assemblies, data centre power and connectivity,
electric vehicles, and consumer electricals. We are headquartered in the UK
and operate from 20 manufacturing locations with a global workforce of over
6,900 employees across 22 countries. Our products are sold through our own
locally based sales teams and through authorised distributor partners to
Original Equipment Manufacturers ('OEMs') and Electronic Manufacturing
Services ('EMS') companies worldwide. All of the products and services that we
offer are integral to the increasingly complex digital world in which we live,
providing power and connectivity from the most common household items to the
most complex medical equipment. For more information, please visit
www.volex.com

 

-ENDS-

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQJFMMTMTMMBAT