E2V.L Regulatory News (E2V)

25 January 2016

e2v technologies plc

Acquisition of Signal Processing (SP) Devices Sweden AB and Q3 Trading Update

Acquisition of Signal Processing (SP) Devices Sweden AB 

e2v technologies plc (e2v), the specialist provider of innovative technology for high performance systems and equipment, today announces the acquisition of Linköping-based Signal Processing (SP) Devices Sweden AB ("SP Devices"), a leader in the design and development of high performance analogue-to-digital processing technology for up to US$18 million (£12 million).

From its core semiconductor component offering for aerospace and defence industries, e2v's Semiconductor division is continuing to build a signal chain solutions business to accelerate its growth ambitions across key industrial automation, healthcare, communications, safety and discovery end markets.

SP Devices provides high performance sub-system solutions for analogue to digital conversion applications. These are used by customers including leading original equipment manufacturers across a number of sectors, including industrial test & measurement, healthcare, communications and science. It also brings proven patented technology in software and board level sub-systems and services, which complements and enhances e2v's broadband data converter business.

SP Devices was established by a team from Linköping University which will continue to drive the business under e2v's ownership. In the year to 31 December 2015 SP Devices made sales of approximately US$4.0 million and is expected to grow sales and its profit margin significantly this year. The transaction is consistent with e2v's stated ambition of accelerating growth in Semiconductors, one of its four priority business areas. The acquisition is expected to be earnings accretive in the financial year ending 31 March 2017.

The initial cash purchase price is US$14 million (£9.5 million) with an earn-out of up to a further $4 million (£2.7 million) in cash, dependent on revenue growth targets. The SP Devices' management team will remain with the business. The cash consideration is being funded from e2v's existing resources.

Commenting on the acquisition e2v's Group CEO, Steve Blair, said:

"Semiconductors is one of the four priority areas for investment. We believe we can expand the business through developing signal path sub-system solutions for our customers and SP Devices accelerates this strategy, bringing analogue-to-digital conversion capabilities protected by proprietary IP. It has a great fit with our Semiconductor broadband data converter business and I am delighted to welcome the SP Devices team to e2v."

Q3 Trading Update

In the quarter, the Group's businesses performed in line with expectations overall apart from Space Imaging where we have not seen the anticipated acceleration in programmes delivery, which remain technically challenging.

Nevertheless, assuming stable FX and market conditions, management expects a satisfactory outcome for the Group's full year trading performance.

The financial position of the Group remains strong.

The next update on trading for the year ending 31 March 2016 is the full year results announcement, which is scheduled for release on Monday 16 May 2016.

Notes to editors

1. e2v technologies plc is Bringing life to technology. It partners with its customers to improve, save and protect people's lives. Delivering innovative technology for high performance systems and equipment, e2v leads developments in communications, automation, discovery, healthcare and the environment.

2. All financial information included in this release is sourced from unaudited management accounts and excludes any specific items.

3. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.

No statement made in this announcement is intended to be, and should not be construed as, a profit forecast and should not be interpreted to mean the underlying earnings per e2v share for the current or future financial years will necessarily match, or be greater or less than, the historical underlying earnings per e2v share.