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Bids, Mergers and Takeovers

Acal acquires Variohm; raising £14.1m

20 January 2017 07:29

Acal - a leading international supplier of customised electronics to industry - has acquired Variohm Holdings for up to £13.85m and announced a proposed placing to raise approximately £14.1m, gross.

Acal also said that trading in the third quarter was in line with management expectations.

Group sales increased by 21% and by 5% CER, with orders up 4% CER.

As expected, organic sales for the quarter improved, being flat with last year compared with a 7% decline in the first half.

The group remains on track to deliver positive organic growth in the final quarter.

Variohm is a UK based designer, manufacturer and distributor of electronic sensors and switches which reported audited revenues of £19.4 million, generating an EBITDA of £2.0 million and profit before tax of £1.6 million, for the year ended 30 April 2016. Acal said the business has continued to grow in its current financial year.

The consideration for Variohm comprises an initial cash consideration of £12.0m, with further contingent cash consideration of up to a maximum of £1.85m, subject to the satisfaction of certain conditions and growth targets.

Acal said the acquisition was highly complementary to the group's existing businesses and represented a further step in the group's stated strategy of growing its Design & Manufacturing division with highly differentiated niche and customised electronic components.

The acquisition will be funded from the proposed placing of 6,418,308 new ordinary shares at 220p apiece to raise gross proceeds of approximately £14.1m.

Group chief executive Nick Jefferies said: "The acquisition of Variohm continues our strategy of building a differentiated Group with higher operating margins through the acquisition of high quality, growing design and manufacturing businesses.

"Variohm has a long established track record of supplying high quality sensors, switches, and motion measurement systems to industrial customers in the UK and internationally.

"As part of the Acal Group, Variohm will gain access to our base of over 25,000 customers and with it, new sales opportunities."

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Related Company: ACL

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