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LONDON (Alliance News) - Coral Products PLC Wednesday said it has agreed to buy specialist PVC and plastic injection moulding business Tatra Plastics Manufacturing Ltd for GBP2.5 million in cash and shares.
The plastics manufacturer said GBP2.0 million will be satisfied in cash and GBP500,000 will be satisfied by the issue of 3.3 million new Coral shares to the owners of Tatra at a price of 15 pence per share. Coral shares were quoted down 0.7% at 13.65 pence Wednesday morning.
Coral said the cash consideration is being satisfied from the proceeds of a placing of 12.6 million new Coral shares at 13.5 pence per share by Hume Capital Securities PLC with new and existing investors to raise GBP1.7 million for Coral, plus GBP500,000 of bank debt.
The company said West Yorkshire-based Tatra has current contracts with a number of major corporations in the telecommunications and rail industries and has for the last five years been developing and manufacturing products for the fibre optic market. The acquisition will provide Coral with an entry into the rail and telecoms markets and expand Coral's range of products.
For the year ended December 31, Tatra posted pretax profit of GBP200,000, on sales of GBP3.2 million. Tatra is expected to be earnings-enhancing for Coral in its first full year as part of the Coral group of companies.
Coral said it hopes to reduce Tatra's fixed costs base by utilising manufacturing capacity at its facility in Haydock.
Following the merge, Paul Freud, Tatra's chairman will be appointed as executive development director of the enlarged company.
Coral said it will publish its full-year results to April 30 on or around July 11.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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