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LONDON (Alliance News) - discoverIE Group PLC on Tuesday said it has raised around GBP29 million via a placing in order to acquire Coil-Tran Corp and Positek Ltd.
The placing price for the 7.3 million shares issued was 400 pence per share, a 3.9% discount to its closing price on Monday. The total number of discoverIE shares in issue is now 80.7 million.
Shares in dicoverIE were down 0.2% at 415.00p on Tuesday at noon.
Custom electronics maker discoverIE will pay an initial USD15.2 million in cash for Coil-Tran, which trades as Hobart Electronics, plus a contingent cash consideration of as much as USD4.0 million based on its three-year performance.
Coil-Tran is a US-based company with four manufacturing facilities in Mexico and the US. It designs and manufactures custom transformers, magnetic components, and inductors.
The company's 2018 revenue totalled USD13.0 million and its annual earnings before interest, taxation, depreciation, and amortization came to USD2.1 million.
The payment for UK-based Positek is an initial GBP4.2 million, plus contingent payments of up to GBP400,000 based on targets in the next 18 months.
Positek designs and produces linear, rotary, tilt, and submersible sensors. Revenue for its year ended August 31 was GBP1.5 million, generating an Ebitda of GBP600,000.
DiscoverIE Chief Executive Nick Jefferies said: "The acquisitions of Hobart and Positek continue our strategy of building a higher margin, international group that designs and manufactures customised electronics. Both companies have long-established track records of supplying high quality products into their respective markets.
"As part of the group, both companies will gain access to our wider base of customers and with it, new sales opportunities, whilst discoverIE will gain access to efficiencies from manufacturing in Mexico and new cross-selling opportunities."
The company also issued a trading update in which it said fourth quarter trading was strong, and discoverIE expects to post results for its year ended March 31 meeting board expectations.
Group fourth quarter sales were up 12% on a reported basis and 8% in an organic basis, which excludes acquisitions. Orders grew 8% organically.
Organically, looking divisionally, Design & Manufacturing sales and orders were up 9%, while Customer Supply sales were up 7% with orders up 5%.
In its financial 2019 year as a whole, group sales were up 13% on a reported basis, 14% at constant currency, and 8% organically with organic order growth totalling 7%.
Annual organic Design & Manufacturing sales grew 10% with order up 11% and Custom Supply sales were up 5% organically with orders up 3%.
As at March 31, the company net debt was "lower than expected", which resulted in a gearing ratio of 1.8 times.
