LONDON: discoverIE, a leading international designer, manufacturer and supplier of customised electronics to industry, announced the acquisitions of Coil-Tran Corporation which trades as Hobart Electronics and of Positek Limited together with a proposed placing to raise gross proceeds of approximately £29 million.
Hobart is a US-based designer and manufacturer of custom transformers, inductors and magnetic components, which reported revenues of $13.0 million (£10.0 million) for its year ended 31 December 2018, generating reported EBITDA of $2.1 million (£1.6 million).
The consideration for Hobart comprises an initial cash consideration of $15.2 million (£11.7 million, the “Initial Hobart Consideration”) and a further contingent cash consideration of up to $4.0 million (£3.1 million) which is subject to customary adjustments, payable subject to the achievement of certain growth targets over the next three years.
Positek is a UK-based designer and manufacturer of rugged, high accuracy linear, rotary, tilt and submersible sensors, supplying international markets, which reported revenues of £1.5 million for its year ended 31 August 2018, generating underlying EBITDA of £0.6 million.
The consideration for Positek comprises an initial cash consideration of £4.2 million (the “Initial Positek Consideration”) with further contingent cash consideration of up to £0.4 million, payable subject to the achievement of certain integration and profit targets in the next 18 months.
The Acquisitions represent a further step in the Group’s stated strategy:
Expand the Group’s international footprint, with over 80 percent of acquired revenues generated in North America, increasing overall D&M revenues from outside Europe by 2ppts to 29% on a pro forma first half-year basis;
Create further organic growth opportunities in target markets of renewable energy, transportation, medical and industrial connectivity;
Expand regional manufacturing with production in Mexico and create opportunities for efficiencies;
Create cross-selling and synergy opportunities with the wider Group; and
Enhance underlying operating margins for both the D&M division and the Group as a whole with Hobart and Positek generating underlying operating margins ahead of those in D&M.
Nick Jefferies, Group Chief Executive of discoverIE, said: “The acquisitions of Hobart and Positek continue our strategy of building a higher margin, international Group that designs and manufactures customised electronics. Both companies have long-established track records of supplying high quality products into their respective markets. As part of the Group, both companies will gain access to our wider base of customers and with it, new sales opportunities, whilst discoverIE will gain access to efficiencies from manufacturing in Mexico and new cross-selling opportunities. We are delighted to welcome Hobart, Positek and all their employees into the Group.”[the_ad id=”31605”]