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(Alliance News) - LPA Group PLC on Monday said it has conditionally agreed to buy a product line from Amphenol Ltd for GBP500,000.
The Essex-based LED lighting and electro-mechanical systems maker said the product line is Amphenol's UK historic range of railway inter-carriage electrical connectors, complementing LPA Connection Systems' existing product range.
It replaces a ten-year licensing agreement between LPA and Amphenol,which was signed in May 2021. Under the original agreement, LPA undertook the manufacture and supply of Amphenol connectors to the UK rail aftermarket customer base. The profits from the product line were shared on a 50-50 basis between the two parties.
However, the acquisition allows LPA to continue to manufacture and supply the railway inter-carriage electrical connectors direct to the customer, and now retaining all associated profits.
The revenue for this product line for the year ended September 30, 2022, was GBP388,000, with a total pretax profit of GBP115,000 split between the two parties.
Chief Executive Paul Curtis said: "This is an excellent agreement for all parties, assisting both in their strategies of development and growth for the coming years. The aftercare market is a key focus for LPA and these products provide access to nearly 3,000 existing vehicles, to which we can offer our excellent levels of quality and support over the coming decade. This product line will support the Group's delivery of [financial] results in line with existing Board expectations."
Shares in LPA were up 1.8% to 85.00 pence each in London on Monday afternoon.
By Sophie Rose, Alliance News reporter
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