Judges Scientific Regulatory News (JDG)

10 Jun 2009 07:00

10 June 2009

JUDGES SCIENTIFIC plc

("Judges Scientific" or the "Company")

ACQUISITION OF QUORUM TECHNOLOGIES LIMITED

Judges Scientific (formerly Judges Capital plc), the parent company of a group that specialises in the design, manufacture and sale of scientific instruments, announces that it has today completed the acquisition of the entire issued share capital of Quorum Technologies Limited ("Quorum" or the "Acquisition") for a total consideration of up to £1.5 million. 

Quorum designs manufactures and distributes sample preparation instruments for use in electron microscopy. Imaging in electron microscopy generally requires samples to be electrically conductive in order to prevent a build up of electrical charges which would adversely affect the clarity of images. Typical sample preparation will involve some combination of cleaning, drying, coating or freezing prior to samples being introduced into the vacuum chamber of an electron microscope. Instruments produced by Quorum for sample freezing ("cryo") and transfer under vacuum are manufactured at the company's plant in Ringmer, East Sussex, while those used to coat non-cryo samples are primarily produced at its site in Ashford, Kent.

Quorum's products are marketed principally under the Polaron and Emitech brand names. Customers include many of the world's leading universities and research and forensic laboratories, as well as the major manufacturers of electron microscopes. Applications for the technology are to be found in all the life and materials sciences, as well as cutting-edge industrial technologies such as semiconductor production.

Quorum was founded in 2001 by Bob Kenhard and three colleagues through the purchase of a small business engaged in the manufacture of the Polaron range of sample preparation instruments from VG Systems Limited, a wholly-owned division of Thermo Electron Corporation. Polaron is a widely respected brand in the field of electron microscopy, having been established at the vanguard of the growth in this technology during the 1960s. In 2005, Quorum acquired the assets and trade of Emitech Limited, a major UK competitor and a significant brand in sample preparation.

Mr Kenhard, aged 61, will remain with Quorum for a period of up to a year as Managing Director and thereafter as a consultant to ensure a smooth transition before his eventual retirement.

Quorum's audited accounts for the year ended 31 October 2008 show sales of £4.0 million, the majority of which was exported, on which the company generated operating profits of £749,000. Net tangible assets as at 31 October 2008 amounted to £1.1 million. Quorum's operating profits figure of £749,000 includes a number of items which, had Quorum been a part of the Judges Scientific group of companies during that financial year, would not have been included. The Board of Judges Scientific believes that the exclusion of such items would have resulted in a lower operating profit for Quorum of approximately £496,000. The Board expects the Acquisition to be earnings-enhancing in the current year.

The initial consideration for the Acquisition being paid by Judges is £1.2 million in cash. An additional payment will be made to reflect the working capital available at completion in excess of the ongoing requirements of the business. Further consideration will be payable to the vendors based on Quorum's earnings before interest and tax ("EBIT") in the twelve months following completion; under this earnout arrangement, the vendors will receive three times the amount by which Quorum's EBIT exceeds £400,000 up to a maximum payment of £300,000.

The Acquisition has been financed out of surplus funds. The Bank of Scotland has agreed (subject to the finalisation of documentation) to make available to Judges Scientific a £4 million term loan, of which £3 million will be drawn down to refinance this acquisition and to refinance the Company's existing borrowing, of which approximately £1.7 million remains outstanding. The additional £1 million is conditionally available to be drawn down in the event of further M&A activity. In addition, a £500,000 overdraft facility will continue to be available to the Company.

Alex Hambro, Chairman of Judges Scientific, commented: "I am delighted that we have acquired this attractive business without issuing shares and without incurring imprudent levels of debt. It is important to pursue our strategy of enhancing earnings through the acquisition of niche businesses in our sector while adjusting our short term ambitions to the realities of today's financial environment."

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

Web sites:

Judges Scientific: www.judges.uk.com 

Quorum: www.quorumtech.com