Acquisition of Manufacturing

RNS Number : 4873V

600 Group PLC

02 November 2010

 



The 600 Group PLC ("600 Group" or the "Group")

Acquisition of Manufacturing Facility in Poland

600 Group today announces it has signed an agreement to acquire a machine tool manufacturing facility in Tarnow, Poland for a cash consideration of €1 million.

The acquisition relates to assets amounting to an aggregate value of €1 million, representing fixed assets, tooling and inventory, together with195 employees, and is subject to regulatory approval by the courts in Poland.  €500,000 of the cash consideration will be settled on receipt of court approval, €250,000 by 2 February 2011 and €250,000 by 31 July 2011.

The Tarnow facility formerly carried out civil production activities within a subsidiary of ZMT, itself part of Bumar Group, Poland's largest state-owned defence business.  600 Group assumes management control of the facility with immediate effect. 

Commenting on the acquisition, David Norman, CEO of 600 Group, said: "This is an important step forward for 600 Group.  It fundamentally changes our machine tools business model with the facility in Tarnow combining with our UK factories to give an EU manufacturing footprint capable of servicing the requirements of our international sales organisation with lead time and quality benefits for our customers.  Ultimately, once the new facility has been successfully integrated, we expect a significant shortening of the supply chain to reduce the working capital requirements of the Group.  We also see the potential benefits of having a skilled workforce able to manufacture products which will complement our activities in the precision components area as well as machine tools.  We also believe the Central and Eastern European markets will become strategically more important for the Group."

For further information, please contact:
The 600 Group PLC	Tel: [phone]
David Norman, Chief Executive
Martyn Wakeman, Finance Director
Rawlings Financial PR Limited	Tel: [phone]
Catriona Valentine
Keeley Clarke
Evolution Securities Limited	Tel: [phone]
Joanne Lake
Casper Kaars Sijpesteijn

Company Description

The 600 Group PLC ("the Group") is a diversified engineering group with four principal areas of activity:

Machine Tools (41% of sales) - the business has a strong reputation in the market for metal turning machines.  Products range from small conventional machines for education markets, CNC workshop machines and CNC production machines.  The European manufacturing footprint is supported by selected outsourcing partners and machines are marketed through the Group's wholly owned international sales organisation.

Precision Engineered Components (26% of sales) - machine spares are distributed to customers globally to help maintain the installed base of group machines which number in excess of 100,000.  Additionally work holding products and taper roller bearings are sold via specialist distributors to OEMs including other machine builders.

Laser Marking (15% of sales) - laser marking is a technologically superior alternative to ink jet marking.  It requires no consumables and can operate on a continuous high speed basis when integrated into customers' production lines.  The business has its own technology and proprietary software.  Customer applications are diverse and range from telecommunications to pharmaceuticals.  The requirement for increased product and component traceability is one of the market drivers.

Mechanical Handling and Waste Management (18% of sales) - the business sells equipment into Sub Saharan African markets from its three locations in South Africa.  Improvements to municipal infrastructures, mineral extraction and electrification are significant drivers for this business.  Distribution of world class brands is supported by wholly owned workshop and factory facilities.

 

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