Acquisition

RNS Number : 1135Q

TT Electronics PLC

04 June 2018

 

4 June 2018

TT Electronics plc

Acquisition of Precision Inc.

This announcement contains inside information

TT Electronics ("TT" or the "Group"), a global provider of engineered electronics for performance critical applications, today announces the acquisition of Precision Inc. ("Precision") for an initial consideration of $23.5 million and up to an additional $4.0 million which may become payable subject to business performance.

Headquartered in Minneapolis, US, Precision is an industry leading designer and manufacturer of precision electromagnetic product solutions for critical applications. Precision has customers in medical, industrial and aerospace and defence markets, served by around 160 employees in the US and China.

Precision brings new design, simulation and manufacturing capabilities to TT in electromagnetics, one of our focus areas for growth. Precision's products are primarily sold into medical applications including pace makers, neurological implants and other in-body equipment as well as external diagnostic equipment such as dialysis machines and MRI scanners. Precision also serves industrial and aerospace and defence customers in applications including satellite power supplies and aerospace guidance systems. Precision's capabilities include high-reliability, ultra-fine wire winding, particularly suited to components that require exceptionally high levels of precision. Precision will be integrated into the Power Electronics division.

In the year ended 31 December 2017, Precision reported revenues of $21.0 million and EBIT of $2.3 million. Gross assets were approximately $7.8 million as at 31 December 2017. The acquisition is expected to be immediately earnings enhancing, to generate mid-teens operating margins, and to exceed our 12% return on invested capital acquisition hurdle rate in the first full financial year of ownership.

Commenting on the acquisition, Richard Tyson, Chief Executive Officer said:

"The acquisition of Precision is the second acquisition since we transformed the Group with the sale of the Transportation division in 2017. The acquisition of Precision is an excellent fit with both our business and our strategy for growth and higher margins. It has a strong position in markets where the proliferation of electronics is increasingly important and will extend our capability for power electronic solutions in the important medical, industrial and aerospace and defence markets in the US. We remain committed to creating value for our shareholders and we expect to hit our financial return hurdle rate in the first full year.

I am delighted to welcome Precision's employees to TT as we continue to build differentiated capabilities and engineer smarter solutions together with our customers."

For further information please contact:
TT Electronics plc	Tel: [phone]
Richard Tyson, Chief Executive Officer Mark Hoad, Chief Financial Officer Emma Darke, Head of Investor Relations and Communications
MHP	Tel: [phone]
Tim Rowntree / Katie Hunt

About TT Electronics

TT Electronics is a global provider of engineered electronics for performance critical applications. The Company works with market-leading customers in the industrial, aerospace and defence, medical, and transportation sectors. TT has three divisions, Sensors and Specialist Components, Power Electronics and Global Manufacturing Solutions.

The product offerings in the Sensors and Specialist Components division include circuit protection, current sensing, signal conditioning, optoelectronics, and sensors for torque, position, pressure, flow and temperature. The Power Electronics division typically designs and manufactures specialist, high reliability electronic components and sub-assemblies supplying into power management, engine controls and connectivity systems. The Global Manufacturing Solutions division provide high mix low volume manufacturing solutions for products in a wide range of end applications ranging from medical devices, to power control modules used in rail transport infrastructure.

Cautionary statement

This announcement contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this announcement. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

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