REG - Xaar PLC - Acquisition of Megnajet

XaarAnnouncement

03/03/2022 07:00

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RNS Number : 4543D  Xaar PLC  03 March 2022

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public domain.

 

 

Xaar plc

 

Acquisition of Megnajet

 

Strengthening Xaar's integrated inkjet solutions to accelerate growth

 

 

Xaar plc ("Xaar"), the leading inkjet printing technology group, is pleased to
announce it has acquired Megnajet Ltd and Technomation Ltd, whose businesses
trade together under the name of Megnajet ("Megnajet") (the "Acquisition").
Post Acquisition it is intended that the businesses of Megnajet Ltd and
Technomation Ltd will be merged and the combined business will continue
trading under the Megnajet name.

 

Megnajet is one of the leading designers and manufacturers of industrial ink
management and supply systems for digital inkjet. The Acquisition will
accelerate Xaar's growth strategy by creating a more integrated inkjet
solution whereby customers can access more of the printing ecosystem (such as
ink supply systems and the electronics) from Xaar. Megnajet offers a broad
product range including one of the most integrated and compact ink management
and supply systems, and will form part of the end-to-end solution helping
Xaar's UDI customers reduce their development timescales and shorten their
time to market while attracting a broader range of commercial opportunities
for Xaar.

 

The initial cash consideration for the acquisition of Megnajet Ltd comprises
£1.8 million, with an additional £0.2 million deferred consideration to be
paid in two years' time. The initial cash consideration for the acquisition of
Technomation Ltd comprises £1.8 million, with an additional £0.2 million
deferred consideration to be paid in two years' time. The combined initial
consideration and deferred consideration for the Acquisition is being funded
from Xaar's existing resources. Megnajet Ltd and Technomation Ltd are both
being acquired on a cash free, debt free, and normalised working capital
basis. Amounts will be adjusted up or down following completion subject to
completion accounts within 60 days, and will be satisfied in cash.

 

Following the Acquisition, the Xaar balance sheet remains strong and
well-capitalised.

 

For the year ended 28 February 2021 Megnajet Ltd generated a profit before tax
of £0.3 million and had gross assets of £1.3 million (unaudited). For the
year ended 31 January 2021, Technomation Ltd generated a profit before tax of
£0.4 million and had gross assets of £0.6 million (unaudited).

 

The Board expects the Acquisition to contribute an annualised revenue of
approximately £3 million and to be earnings accretive in the current
financial year ending 31 December 2022.

 

Graham Strudwick, Technical Director at Megnajet, joins the Xaar Group as
Director of System Component Integration.

 

 

John Mills, CEO of Xaar, commented "The acquisition of Megnajet will
accelerate our growth strategy by enabling us to offer existing and new
customers a more integrated inkjet solution.

 

"Having worked with Megnajet for several years we know the company has an
excellent reputation within the inkjet industry for delivering compact and
easy to integrate products.

"This acquisition is a great addition to our business and we are delighted to
welcome everyone at Megnajet into the Xaar Group."

 

Graham Strudwick, Director of System Component Integration, commented "This is
an exciting opportunity for Megnajet and will ensure the company continues to
develop and grow.  Xaar has a great track record for innovation and
leadership within the inkjet industry. We're delighted to become part of the
Xaar team".

 

 

 

 

Enquiries:

 Xaar plc                               +44 (0)1223 423 663
 John Mills, Chief Executive Officer

 Ian Tichias, Chief Financial Officer

 Tulchan Communications                 +44 (0)20 7353 4200
 James Macey White

 Giles Kernick

 

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