TPG.L Share News (TPG)

(ShareCast News) - Engineering firm TP Group is to buy ALS Technologies and Flexible Software Solutions (FSS) for a combined £2.75m in order to enhance its presence in the defence, commercial and aerospace sectors.An initial £1.25m will be paid, funded from the company's existing cash resources on a debt and cash free basis, with a further payment of up to £1.5m to be made depending on the delivery of profit related earn-out targets over the first 20 months from completion.The AIM-listed company said that the acquisitions of ALD and FSS will extend its existing business activity to specialise in systems engineering and technical project support to defence and other sectors. The acquisitions will also give the company access to additional customers and programmes, while allowing it to cross sell new services.The purchases will be funded from TP Group's existing cash resources and will be accretive to earnings in the year of completion.TP Group chief executive Phil Cartmell said: "The enlarged group will bring critical mass to our services business and should stimulate growth in both ALS and FSS, as they benefit from greater market reach and presence delivered by TPG."Somerset-based ALS, which provides systems engineering, mission support, flight control, combat systems and tactical information systems for the aerospace and defence markets, reporter revenue of £4.3m and pre-tax profit of £500,000 in the financial year ended 30 September 2016, and had assets worth £800,000.FSS, also based in Somerset, develops safety-critical software for the defence and commercial sectors, generated revenue of about £200,00 and was about breakeven in the year ended 31 December 2016, with assets worth £100,000.Steve Lafferty and Steve Bray, directors of both companies, will remain with the businesses and continue to lead activities.Shares in TP Group were down 0.39% to 6.35p at 0853 GMT.