Gooch & Housego Regulatory News (GHH)

Gooch & Housego PLC ("G&H")

Acquisition of Constelex Technology Enablers Limited

"Enhancing the Systems Capability"

Gooch & Housego PLC, the specialist manufacturer of optical components & systems, announces that it has completed the acquisition of the entire issued share capital of Constelex Technology Enablers Limited (Constelex), an Athens, Greece, based designer and manufacturer of advanced photonic systems.

Constelex is a small, start-up company specialising in low-noise optical fibre amplifiers. With a mission to become a world-leading design-house and solution provider for photonic systems with applications in telecommunications, space, defence and life sciences, Constelex has built up a strong reputation for technical excellence since it was founded in 2009. As a result, Constelex has enjoyed considerable success in securing contracts from the European Space Agency and attracting funding from the European Union to develop complex photonic systems for predominantly space and satellite applications.

For G&H, the value of Constelex lies in its proven capability in photonic systems for space applications, its relationships with satellite manufacturers and space agencies and its participation in a number of product development contracts and R&D funded programmes. The objective of these activities is to develop and demonstrate next generation systems applicable to satellite communications. By working in collaboration with satellite manufacturers there is a clear route to commercial exploitation of the technology. Participation of Constelex in development contracts and R&D programmes means that Constelex will be self-financing as part of G&H.

The acquisition of Constelex is aligned with G&H's strategic objective of moving up the value chain by leveraging its leadership in components to develop a higher-added-value capability at the sub-systems and systems level. In February this year G&H established the Systems Technology Group (STG) at its Torquay, UK, facility to function as a separate business unit with a remit to design, develop and prototype systems-level products. The objective was to build a multi-disciplinary team with expertise in mechanical, electronic and software design and modelling and to integrate these technologies with G&H's expertise in photonics.

Early in 2014 the Constelex team, will relocate to Torquay and become fully integrated into the STG. Operations in Greece will be effectively wound-up at that time. Apart from some small locally funded projects in Greece, it is expected that all of the material programmes and their funding will be transferred to G&H, which will take over the responsibilities of Constelex. As G&H is already a participant in several of these projects, continuity should be seamless.

The gross consideration paid by G&H will be €0.650 million, comprising €0.4 million in cash, funded from existing cash and debt facilities, at completion, followed by €0.25 million in G&H shares once activities are relocated to the UK.

Gareth Jones, Chief Executive of Gooch & Housego commented: -

"Building upon the creation of the Systems Technology Group earlier this year, the acquisition of Constelex demonstrates Gooch & Housego's commitment to accelerating organic growth through the development of high added-value photonic systems for new markets such as space and satellite communications."