Last checked at 21 Mar 2011 07:00
JUDGES SCIENTIFIC plc
("Judges Scientific", "Judges" or the "Company")
ACQUISITION OF 51% OF DEBEN UK LIMITED
Judges Scientific, the parent company of a group engaged in the design, manufacture and sale of scientific instruments, announces that it completed on 18 March the acquisition of a 51% indirect interest in Deben UK Limited ("Deben") for a cash consideration of £3.26 million (the "Acquisition").
An additional payment will be made to reflect the working capital available at completion in excess of the ongoing requirements of the business. Such payment is expected by Judges to be covered by the cash inherited on completion.
The Acquisition has been executed through Bordeaux Acquisition Limited ("BAL"), a 51% owned subsidiary of Judges, which was created for the purpose of effecting the acquisition and which acquired the entirety of Deben's share capital.
Financing of the Acquisition
The Acquisition and associated transaction costs are being financed through a £2,422,250 loan provided by Lloyds Bank Corporate Markets to BAL. The loan is split into two parts, both guaranteed by Judges, and comprises an acquisition component of £2.06 million and a property element of £362,250, secured against the freehold property from which Deben operates its business.
Equity of £1,013,250 was supplied by the BAL shareholders, pro-rata to their respective interests, predominantly in the form of subordinated loans. Gary and Tracey Edwards, the vendors of Deben, have reinvested £497,000 of their sale proceeds to acquire a 49% shareholding in BAL, while Judges invested £516,250 in respect of its 51% interest.
Both parties have entered into a Shareholders' Agreement which includes minority protection provisions and stipulates, inter alia, that BAL has the right of first refusal on potential acquisitions available to the Judges group, provided that such acquisitions meet certain criteria, operate in the field of electron microscopy and can be financed independently by BAL.
Information on Deben
Deben designs, manufactures and sells devices used to enable or improve the observation of objects under a microscope. The principal product groups are motor control systems, micro-tensile stages, cooling stages, digital imaging for electron microscopes and beam blanking equipment. The products are sold world-wide to OEM customers (microscope manufacturers that incorporate such equipment in their own instruments) or directly to end users such as universities.
The business, established in 1987, is based in Woolpit, Suffolk, and has been managed by Gary Edwards since 1996. It is expected that Mr Edwards, 44, will continue as managing director of Deben for the foreseeable future.
Deben's unaudited accounts for the year ended 31 October 2010 show sales of £2 million and pre-tax profits of £862,000. Operating profits, adjusted to eliminate non-recurring items and to reflect Judges Scientific's practices, would have amounted to £707,000. The accounts show net tangible assets of £2.25 million including net cash of £1.36 million. The freehold property was valued on BAL's behalf at £517,500. The price paid for Deben reflects this valuation as well as a multiple of adjusted operating profit.
The Board believes that this acquisition is an excellent addition to the Group's electron microscopy business and will be immediately earnings enhancing.
Alex Hambro, Chairman of Judges, commented:
"We are delighted to be able to expand our electron microscopy business through the acquisition of Deben. This is a profitable and cash generative business and we expect the transaction, which has not involved the issue of new equity, to be immediately earnings enhancing. We welcome Gary and his team into the Judges group for what we anticipate will be a long and fruitful relationship ".
Enquiries:
David Cicurel, CEO, Judges Scientific: Tel: 01342 323 600
Pascal Keane, Shore Capital: Tel: 020 7408 4090
Melvyn Marckus, Cardew Group: Tel: 07775 896 491
Websites:
Judges Scientific:www.judges.uk.com
Deben: www.deben.co.uk