Last checked at 7 Jan 2022 07:00
SDI Group plc
("SDI", "SDI Group", the "Company" or the "Group")
(AIM: SDI)
Acquisition of Scientific Vacuum Systems Ltd and
Further Atik Cameras Order
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 05 January 2022 of Scientific Vacuum Systems Ltd ("SVS"), a UK manufacturer of physical vapour deposition equipment (the "Acquisition"). Total consideration, including earnout, is forecast to be approximately £4.9 million, net of cash acquired.
Highlights:
• | SVS specialises in custom Physical Vapour Deposition (PVD) systems for the deposition of thin film coatings typically on semiconductor wafers, for use in scientific research, industrial and semiconductor manufacturing applications |
• | SVS are market leaders in the manufacture of production sputter coaters for premium brand razor blade coating |
• | Revenues for the year to September 2021 were approximately £2.5m and EBIT of £0.7 million |
• | Acquisition expected to be immediately earnings enhancing
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Ken Ford, Chairman of SDI said: "The acquisition of SVS is a further step in our Group growth strategy and will reside within our Sensors and Controls division. The Acquisition is expected to be immediately earnings enhancing. We are delighted to welcome Terry Shimell, Philip Eames and their highly technical staff to the SDI Group."
Further Atik Cameras Order
The Company also announces that its Atik Cameras division has received a further firm order for cameras to be used in PCR machines, for delivery in the year ending 30 April 2023, extending the series of orders related to the COVID-19 pandemic.
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 and Scientific Vacuum 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 Scientific Vacuum Systems Ltd
SVS specialises in the design, manufacture and service of bespoke and standard PVD and other vacuum related systems, which typically produce nano/micron thin films by sputtering or electron beam evaporation onto the surface of a substrate under controlled vacuum conditions.
Applications for such systems have included large scientific experiments, semiconductor manufacturing, nuclear installation, electronic component manufacture, and premium brand razor blade manufacture where SVS enjoys good relationships with leading manufacturers.
Additional products include Ion Beam Milling systems used in semiconductor manufacturing and experimental photovoltaic absorber layer deposition equipment for solar panel manufacture. SVS typically produces a handful of high value systems each year in addition to steady revenue from parts, consumables and service.
For the year ended 30 September 2021, SVS achieved revenues of £2.5 million, and EBIT of £0.7 million (unaudited).
Based in Finchampstead, Berkshire, Scientific Vacuum Systems Ltd was founded in 1990 by Terry Shimell and Philip Eames and employs approximately 8 staff. Terry and Philip will continue to lead the company within the SDI Group.
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. The SDI Board considers that there are long term growth drivers for SVS's products and services.
Consideration for the Acquisition
Total consideration is estimated at £4.9 million, excluding cash acquired, and consists of:
• | Initial consideration of £3.17 million paid in cash; |
• | A payment in cash shortly after completion, equivalent to the net tangible assets of SVS at completion, currently estimated at £1.4 million and which net tangible assets are estimated to include c.£0.6 million of cash and no bank debt (subject to completion accounts); and |
• | An earnout cash payment, payable after 30 September 2022, currently estimated at £0.9 million and dependent on the EBIT performance of SVS in the year to 30 September 2022.
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The total consideration is capped at £5.5 million (including estimated £0.6 million of cash acquired), and this would be payable based on Scientific Vacuum Systems achieving adjusted EBIT for the year to 30 September 2022 in excess of £1.1 million.
The cash consideration will be funded from existing cash resources and from the Group's revolving credit facility with HSBC UK Bank. As at 31 December 2021, the Group had cash of approximately £7.3 million (unaudited), bank debt of £3.0 million (unaudited), and £17.0 million of undrawn bank facility.
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.