Last checked at 28 Mar 2022 07:00
SDI Group plc
("SDI", "SDI Group", the "Company" or the "Group")
(AIM: SDI)
Acquisition of Safelab Systems Limited
and Total Voting Rights
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 control applications, is pleased to announce the acquisition on 24 March 2022 of Safelab Systems Limited ("Safelab"), a UK manufacturer of fume cupboards (the "Acquisition"). Total consideration is forecast to be approximately £7.7 million, net of cash acquired.
Highlights:
· Safelab produces high specification fume cupboards and similar cabinets, for both commercial and research laboratories and with a special focus on the education sector which requires versatile and fully-featured ducted cabinets often specified in newly built or refurbished laboratory facilities
· Safelab's cabinets are designed and manufactured in a dedicated facility in Weston-Super-Mare
· Revenues for the year ended 28 February 2022 are expected to be approximately £4.8m, with adjusted EBIT of £0.9 million
· Acquisition expected to be broadly neutral to FY2022 profit and earnings enhancing in FY2023
· Follows SDI's December 2020 acquisition of Monmouth Scientific Limited, a manufacturer of clean rooms, fume cabinets and safety cabinets based in Bridgwater. The Company expects to maintain the identity and autonomy of both companies in their current locations, while looking for opportunities to enhance the total customer offer
Ken Ford, Chairman of SDI said: "The acquisition of Safelab is another step in our Group growth strategy, and the second significant acquisition of the financial year, demonstrating again the opportunities to acquire in sectors related to our existing portfolio. The Acquisition is expected to be earnings enhancing in FY2023. We are delighted to welcome Roger Guess and his staff to the SDI Group."
FURTHER INFORMATION ON THE ACQUISITION IS SET OUT BELOW
Enquiries
SDI Group plc 01223 320480
Ken Ford, Chairman
Mike Creedon, CEO
Jon Abell, CFO
www.thesdigroup.net
finnCap Ltd 020 7220 0500
Ed Frisby/Kate Bannatyne/Milesh Hindocha - Corporate Finance
Andrew Burdis/Sunila de Silva - ECM
JW Communications 07818 430877
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, Chell Instruments, Monmouth Scientific, Uniform Engineering, Scientific Vacuum Systems and Safelab Systems.
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. www.thesdigroup.net
The following information is in relation to the Acquisition
About Safelab Systems Limited
Safelab specialises in the design, manufacture and servicing of fume cupboards and related items, used within laboratories to prevent fumes from entering the laboratory environment. Such fume cupboards are typically used in school, university and other laboratories to perform experiments and to isolate processes likely to produce fumes which may be harmful to people in the lab. Safelab sells to individual schools, universities and laboratories as well as to building contractors and to scientific equipment distributors. Almost all of Safelab sales are to UK-based customers.
For the year ended 28 February 2022, Safelab is expected to have achieved revenues of approximately £4.8 million, adjusted EBIT of £0.9 million (unaudited and adjusted to eliminate non-recurring items and to reflect Safelab's ongoing cost base within the Group) and unaudited statutory profit before tax of approximately £0.7 million.
Based in Weston-Super-Mare, Somerset, Safelab has been managed for the past 19 years by majority owner-manager Roger Guess, who will continue to lead the business under SDI Group ownership. Safelab has approximately 41 staff.
Acquisition rationale
The Acquisition is in line with the Group's strategy of acquiring businesses with complementary scientific and technology products, with capable management teams in place and with opportunities to grow further under the SDI Group structure. Safelab will reside within SDI's Sensors and Controls division. The SDI Board considers that there are long term growth drivers for Safelab's products and services.
Consideration for the Acquisition
Total consideration is estimated at £7.7 million, excluding cash acquired, and consists of:
· Initial consideration of £5.5 million, of which £5.3 million paid in cash and £200,000 in ordinary shares of 1 penny each in the capital of the Company ("Ordinary Shares") at a price of 169.9 pence per Ordinary Share (being the average mid-market closing price for the five-business days prior to the date of this announcement). The shares issued are subject to a one-year lock-in agreement*; and
· A payment in cash shortly after completion, equivalent to the net tangible assets of Safelab at completion, currently estimated at £2.9 million and which net tangible assets are estimated to include c.£0.7 million of cash and no bank debt (subject to completion accounts). The net assets include freehold ownership of Safelab's manufacturing facility, valued at approximately £1.2m.
The cash consideration will be funded from existing cash resources and from the Group's revolving credit facility with HSBC UK Bank.
Admission and Total Voting Rights
As referred to above, as part of the consideration for the Acquisition, SDI has issued 117,716 new Ordinary Shares. Application has been made to the London Stock Exchange for 117,716 new Ordinary Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will become effective and trading will commence at 8.00 a.m. on 31 March 2022.
After Admission, the total number of Ordinary Shares in issue will be 102,199,676 and the total number of voting rights will therefore be 102,199,676. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.
*Lock-in Agreement: No disposals of Ordinary Shares without the prior consent of the Company.
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 contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.