TCN.L Regulatory News (TCN)

4 March 2013

Tricorn Group Plc 

 ("Tricorn" or the "Group") 

Acquisition of US tubular products manufacturer

Tricorn Group plc (AIM: TCN.L), the AIM quoted tube manipulation specialist, is pleased to announce that it has agreed to purchase the trade and certain assets of the former Whitley Products Inc ("Whitley") (the "Acquisition") for a total cash consideration of $2.99m (£1.95m). The consideration will be paid from the Group's own cash resources and completion of the Acquisition will occur later today.

Under the terms of the Acquisition, Tricorn will acquire Whitley's property at Franklin, North Carolina, US, fixed assets at the facility, all of the Franklin related inventory and certain plant and equipment from Whitley's other facility located at Plymouth, Indiana, US. The net book value of the assets being acquired is approximately $4.3m (£2.8m).

Whitley, which has been in receivership since January 30 2013, specialises in the manufacture of fabricated tubular products serving the diesel, agricultural and off-highway industries. It services a blue chip OEM customer base.

Whitley had a turnover of $31.8m (£20.8) for the year ended 31 May 2012 (2011: $28.9m (£18.9m)), split approximately equally between the two sites at North Carolina and Indiana. The business posted a net loss of $2.2m (£1.4m) in the year ended 31 May 2012 after a number of one-off costs and interest charges of $1.4m (£0.9m).

The Franklin facility is approximately 60,000 square feet and has around 100 employees. It has extensive capability in tube bending, welding, furnace brazing and end forming.

With the principal activity of the business being acquired so closely aligned to Tricorn's current business activities, and the significant growth opportunities arising from a US manufacturing facility, the directors of Tricorn believe that the Acquisition is highly complementary and significantly enhances the growth prospects for the Group. Although the instability caused by recent events at Whitley will see some reduction in turnover in the short term, the Franklin facility will have installed capacity of around $20m (£13m) annual turnover when the transfer of plant and equipment is complete.

Commenting on the acquisition Mike Welburn, Chief Executive of Tricorn, said:

"Following the establishment of our manufacturing facility in China announced last year, this acquisition represents a further and very significant step in the Tricorn Group achieving a considerable multi-site global business, delivering global tube solutions to a global OEM customer base.

"We have already started to establish close working relationships with Whitley's US customer base and this is an ideal platform from which to increase sales in the US for the Franklin facility and also for Tricorn's existing businesses, particularly our Transportation division. With the opportunities to increase sales, reduce material costs and enhance operational performance we are anticipating the business to be making an increasing contribution to the Group's earnings towards the latter part of our financial year ending March 2014."

In this announcement, an exchange rate of $1.53/£ has been used for illustrative purposes.

Enquires:

Notes to Editors:

Tricorn is a value added manufacturer and specialist manipulator of pipe and tubing assemblies to niche markets worldwide in the Energy & Utilities, Transportation and Aerospace sectors.

Headquartered in Malvern, UK, Tricorn employs around 300 employees and operates through four brands: MTC; Redman Fittings; Maxpower and RMDG Aerospace.