(Sharecast News) - Audio-visual distributor Midwich Group announced an agreement to acquire ProdyTel on Monday - a distributor specialising in professional audio and technical solutions products located near Nuremberg, Germany.
The AIM-traded firm said it would acquire a majority stake of 51% in ProdyTel through its German subsidiary Kern & Stelly for an initial cash payment of €8.5m (£7.4m).
It said the deal included provisions for the potential purchase of the remaining 49% of ProdyTel's share capital in June next year at a fixed cash price of €8.1m.
Additionally, an incentive-linked payment of up to €5.5m would be made in cash in 2026.
ProdyTel was established in 2003 as an audio codec manufacturer and transitioned to distribution in 2014.
The company has since cultivated a robust vendor portfolio featuring brands such as Biamp, Aver and Jabra, mainly serving the corporate and education sectors.
ProdyTel operates throughout Germany and maintains a workforce of 30 employees.
Beyond core distribution services, ProdyTel offers value-added services to its trade customers across Germany, including the ProdyTel Academy, which provides technology seminars, training courses, and product demonstrations within a dedicated 230-square-metre space at its Stein facility.
In the financial year ended 31 December 2022, ProdyTel reported revenues of €22m and a pre-tax profit of €4m.
As of the end of 2022, the company's gross assets amounted to €6.3m.
At the time of signing, ProdyTel possessed net cash assets of €0.7m, with completion contingent on receiving merger control clearance from the German Federal Cartel Office.
"We are delighted to have reached an agreement to acquire ProdyTel, which will strengthen our technology offering in the DACH region," said group managing director Stephen Fenby.
"ProdyTel has a strong reputation in the market, which has enabled it to attract top-tier brands.
"Customers greatly value the expertise the Company is able to offer, and will now be able to benefit from the combined portfolio of ProdyTel and Kern & Stelly."
At 1057 GMT, shares in Midwich Group were down 1.41% at 372.65p.
Reporting by Josh White for Sharecast.com.
Midwich Group (MIDW)