Acquisition of LTE Scientific Limited

RNS Number : 3436U

SDI Group PLC

01 August 2022

 

SDI Group plc

("SDI", "SDI Group", the "Company" or the "Group")

(AIM: SDI)

Acquisition of LTE Scientific Limited

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 and control applications, is pleased to announce the acquisition on 29 July 2022 of LTE Scientific Limited ("LTE Scientific"), a UK manufacturer of sterilizers and decontamination equipment (the "Acquisition"). Total consideration is forecast to be approximately £4.2 million, net of excess cash acquired.

Highlights:

·         LTE Scientific is a leading UK manufacturer of autoclave sterilizers, which sterilize objects placed in a pressure vessel by injecting steam under pressure at temperatures ranging typically from 105˚C to 137˚C.  These are used in laboratories and hospitals.

·       Other manufactured products include environmental rooms and chambers, endoscope storage cabinets, laboratory ovens, incubators and drying cabinets.

·         LTE Scientific operates from a 44,000 square foot company-owned property in the village of Greenfield in the Saddleworth area of Greater Manchester, and has approximately 70 employees.

·           Revenues for the year ended 31 December 2021 were £6.4m, with EBIT of £0.4 million.

·           Acquisition price includes c. £1.65m of freehold property.

·           LTE Scientific will reside in the Company's Sensors and Controls division.

·           Acquisition expected to be enhancing in the current year.

Ken Ford, Chairman of SDI said: "The acquisition of LTE is a further step in our Group growth strategy, demonstrating again the opportunities to acquire businesses with high quality products related to our existing portfolio of equipment used in laboratories and hospitals. The Acquisition is expected to be earnings enhancing in current year FY2023. We are delighted to welcome John Lees and his staff at LTE Scientific 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.sdigroup.com

finnCap Ltd  020 7220 0500

Ed Frisby/Kate Bannatyne/Milesh Hindocha - Corporate Finance

Andrew Burdis/Sunila de Silva - ECM

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, Safelab Systems and LTE Scientific.

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.sdigroup.com

The following information is in relation to the Acquisition

About LTE Scientific Limited

LTE Scientific specialises in the design, manufacture and servicing of sterilizers, decontamination and thermal processing equipment, used in the life science and medical market sectors.

For the year ended 31 December 2021, LTE Scientific achieved revenues of approximately £6.4 million, EBIT of £0.4 million and statutory profit before tax of £0.4 million (all audited).

Based in Greenfield, Greater Manchester, LTE Scientific is managed by John Lees, who has been Managing Director for the past 25 years and will continue to lead the business under SDI Group ownership. LTE Scientific has approximately 70 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. LTE Scientific will reside within SDI's Sensors and Controls division. The SDI Board considers that there are long term growth drivers for LTE Scientific's products and services, and opportunities to expand production in LTE Scientific's flexible factory facilities.

Consideration for the Acquisition

Total consideration is estimated at £5.5 million, including approximately £1.3m excess cash acquired, and consists of:

·         Initial consideration of £4.2 million, payable in cash at completion; and

·         A balancing payment in cash shortly after completion, expected to be of approximately £1.3m, which is dependent on the net tangible assets of LTE Scientific delivered at completion. The net assets include freehold ownership of LTE Scientific's manufacturing facility, valued at approximately £1.65m.

The cash consideration will be funded from existing cash resources and from the Group's revolving credit facility with HSBC UK Bank. As at 30 April 2022, the Group had cash of approximately £1.1 million (audited), bank debt of £4.0 million (audited) and £16.0 million of undrawn bank facility (excluding accordion).

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.

 

END

 

 

ACQRLMBTMTJTTIT