SDI Group Regulatory News (SDI)

SDI Group plc

 ("SDI", the "Company" or the "Group")

(AIM: SDI)

Acquisition of Chell Instruments Limited

The Board of SDI Group plc, the AIM quoted group focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications, is pleased to announce the acquisition on 29 November 2019 of Chell Instruments Limited ("Chell") for a consideration of £4.3m plus an additional cash payment for net assets at completion (the "Acquisition").

Highlights:

·; Chell specialises in the design, manufacture and calibration of pressure, vacuum and gas flow measurement instruments for a variety of sectors including aerospace, vehicle aerodynamics, gas and steam turbine testing and power generation industries

·; For the year ended 31 December 2018, Chell achieved revenue of £4.7m, gross profit of £2.5m and profit before tax of £0.78m

·; The Board has identified areas within Chell that have the potential for growth using the strong management team the company has recruited over the years

·; The Acquisition is expected to be earnings enhancing in its first full year of ownership

Ken Ford, Chairman of SDI said:

"Chell Instruments is another step in our Group growth strategy. It is a complementary fit providing potential areas for growth. The acquisition is in line with our previously announced strategy of organic and acquisitive growth and is expected to be earnings enhancing in its first full year of ownership."

About Chell Instruments Limited

Chell specialises in the design, manufacture and calibration of pressure, vacuum and gas flow measurement instruments for a variety of sectors including aerospace, vehicle aerodynamics, gas and steam turbine testing and power generation industries. Based in North Walsham in Norfolk, Chell was founded in 1976 and employs 34 staff. Of the 34 staff members, 30 are either fully qualified engineers or in training to achieve that status.

For the year ended 31 December 2018 Chell achieved revenues of £4.7m, gross profit of £2.5m and profit before tax of £0.78m. Revenues include service revenues calibrating in service Chell Instrumentation, and instrumentation made by others.

Approximately 76 per cent. of Chell's sales are to the UK with the balance of 24 per cent. being exported.

Chell's competitive advantages are its calibration laboratory, deep understanding of its customers' applications and its own manufacturing facility with industry leading capabilities.

Acquisition rationale

The Acquisition is in line with the Group's strategy of acquiring complementary businesses and the Board has identified areas within Chell that have the potential for growth. Chell will be part of SDI Group's Sensors and Control reporting segment.

Consideration for the Acquisition

Total cash consideration (excluding an additional cash payment for net assets at completion, expected to be less than £1.7m and such assets expected to include a material element of cash) is £4.3m. SDI has funded the cash consideration from existing cash resources and bank debt.

The Board also announces that, in agreement with HSBC Bank plc, it has taken a 3-year amortising term loan of £4.8m to add to the Senior Facility of £5m (not fully drawn), with the end date of both facilities being April 2023. The Group's unaudited net debt position at 31 October 2019 was £0.7m, before adjustment for the effects of reporting under IFRS 16 (Leases).

The Company expects to report its interim results for the six months to 31 October 2019 on 17 December 2019.

Enquiries

SDI Group plc 01223 320 480

Ken Ford, Chairman

Mike Creedon, CEO

Jon Abell, CFO

www.scientificdigitalimaging.com

finnCap Ltd 020 7220 0500

Ed Frisby/Kate Washington - Corporate Finance

Andrew Burdis/Sunila de Silva - ECM

JW Communications 07818 430 877

Julia Wilson - Investor & Public Relations

About SDI Group plc:

SDI designs and manufactures scientific and technology products for use in digital imaging and sensing and control applications including life sciences, healthcare, astronomy, manufacturing, precision optics and art conservation. SDI operates through its company divisions: Atik Cameras, Synoptics, Graticules Optics, Sentek, Astles Control Systems, Applied Thermal Control, MPB Industries and Fistreem.

SDI continues to grow by developing its own technology advancements and by improving its global sales channels, as well as through pursuing strategic, complementary acquisitions.

No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.