Acquisition

Elektron PLC 24 December 2003 FOR IMMEDIATE RELEASE 24 December 2003 ELEKTRON PLC Acquisition of business and assets of Arcoelectric (Holdings) plc Elektron Plc (the 'Company' or 'Elektron'), the AIM quoted components and electronics group, announces that it has acquired the trade and certain assets from the Receiver of Arcolectric (Holdings) Plc ('Holdings') and Arcolectric Switches Plc ('Switches'), together ('Arcolectric'). Arcolectric is a manufacturer of electromechanical components. The Acquisition Elektron has acquired from the Receiver the plant, machinery, fixtures, fittings, tooling and stocks sufficient to continue the business of Switches. Switches operates from an 80,000 square foot facility in Surrey employing 170 staff. The Company manufactures appliance switches, indicator lights and fuseholders for use in domestic appliances and industrial applications. Switches reported an operating profit of £19,000 on turnover of £13.9 million in its last audited accounts to 31 December 2001. Unaudited accounts for the year ended 31 December 2002 show an operating loss of £242,000 on sales of £14.2 million. In the ten months to 31 October 2003, Switches management accounts show an operating loss of £1.4 million on sales of £12.3 million. Since the appointment of the Receiver, Switches' annual salary costs have been reduced by £2.0 million. The premises are being leased for a period of ten years with a five-year break clause at an annual rental of £417,000. Switches exports 75 per cent. of its products to over sixty countries word-wide including the US, China and Turkey. At the time of acquisition Switches had an order book of £2.3 million. Elektron has also acquired from the Receiver the entire issued share capital of Holdings' US distribution subsidiary ('Holdings Inc'), and 99 per cent. of Holdings' manufacturing subsidiary in Tunisia ('Holdings Tunisie'). Elektron has an option to purchase 100 per cent. of Holdings' subsidiary in Hong Kong ('Holdings Hong Kong') which owns a Chinese manufacturing facility. Holdings Inc operates from a leasehold premises of 12,500 square foot in California with a rent of US$90,000 per annum distributing Switches' products. Holdings Inc employs ten staff and in the year ended 31 December 2002 made audited operating profits of US$391,000 on sales of US$4.4 million. In the 11 months to 30 November 2003 management accounts showed US$497,000 operating profit on sales of US$4.4 million and adjusted tangible net assets of US$300,000. Holdings Tunisie operates from a leasehold premises in Tunisia of 30,000 square feet with a rent of TND 120,000 per annum (£1: TND2.17) per annum and employs 300 assembly staff manufacturing products for Switches. In the year ended 31 December 2002 Holdings Tunisie's unaudited accounts showed an operating loss of TND31,000. Management accounts for the ten months to 31 October 2003 show an operating loss of TND155,000. Holdings Hong Kong operates from a 42,000 square foot leasehold premises in Shenzen, China assembling Switches products mainly for sale in Far Eastern markets and employs 200 staff. For the 21 months to 31 December 2002 Holdings Hong Kong's audited accounts showed an operating loss of HK$3.1 million (£1: HK$13.69). Management accounts to 31 October 2003 showed an operating loss of HK$503,000. Consideration The total consideration payable to the Receiver of Holdings and Switches comprises £352,000 in cash and the assumption by Elektron of £1,515,000 of lease finance debt repayable over five years to be secured by a floating charge over the assets purchased from Switches. Funding The acquisition of Arcolectric together with its working capital requirements are being funded from the following sources: • The acquisition of Aridmark Limited from Panther Securities Plc ('Panther') for a consideration of 9,090,909 new Elektron ordinary shares of 5p each of the Company, pursuant to the five year authority granted by shareholders on 12 July 2000, to be issued at a price of 5.5p each. Aridmark Limited is a company with an issued share capital of £500,000 and cash of £500,000 and has not traded since incorporation. The issue is conditional upon admission of the consideration shares to trading on the Alternative Investment Market of the London Stock Exchange ('AIM'). Following the issue of the shares for the acquisition of Aridmark Limited, Panther Securities will hold 13.96 per cent. of the enlarged issued share capital. • A loan from Panther of £975,000 to be released at the option of Panther or Elektron. Elektron has exercised its option for release from the loan in return for rental on Switches' UK leasehold premises in Surrey being £417,000 per annum. • Negotiations are at an advanced stage to raise an additional £600,000 in new equity on substantially the same terms as for Aridmark Limited. Reasons for acquisition The Board of Elektron believes that that acquisition of Arcoelectric is a unique opportunity to acquire a substantial business at a low price from a receiver with extensive market, manufacturing and distribution synergies between Arcolectric and Elektron' s existing subsidiary, Bulgin Components. For further information please contact: Adrian Girling Christopher Leigh Executive Chairman Finance Director Elektron Plc Elektron Plc Tel: 0208 477 9300 Tel: 0208 477 9300 This information is provided by RNS The company news service from the London Stock Exchange

Companies

Checkit (CKT)
UK 100

Latest directors dealings