ACQUISITION OF GLOBAL DIGITAL SYSTEMS LIMITED

RNS Number : 8325Y

Judges Scientific PLC

07 March 2012

 

Judges Scientific plc

7 March 2012

JUDGES SCIENTIFIC plc

("Judges Scientific", "Judges", the "Company" or the "Group")

ACQUISITION OF GLOBAL DIGITAL SYSTEMS LIMITED

Judges Scientific, the parent company of a group engaged in the design, manufacture and sale of scientific instruments, announces that on 6 March it completed the acquisition of 100% of the share capital of GLOBAL DIGITAL SYSTEMS LIMITED ("GDS") for a cash consideration of £7.65 million (the "Acquisition").

An additional payment will be made to reflect the working capital available at completion in excess of the ongoing requirements of the business. Judges expects such payment to be covered by the cash inherited on completion.

Information on GDS

GDS designs, manufactures and sells instruments used to test the physical properties of soil and rocks. The products are sold worldwide to academic institutions and commercial customers conducting geotechnical research or providing testing services in relation to large civil engineering projects.

The company, established in 1979, was controlled by Dr Bruce Menzies and Dr Patrick Hooker and is based in Hook, Hampshire. During the last five years and in the context of planned retirement, the principal vendors arranged an orderly transition to a younger management team; GDS is now largely run by Karl Snelling, the company's Managing Director, and Jerry Sutton, the Technical Sales Director, both of whom will continue in their respective roles following the Acquisition.

The business has pursued excellence in the hardware and software it delivers to its customers and keeps in close touch with the academic world. These factors have enabled the company to achieve a compound annual growth rate of 23% over the last five years. Exports represent 83% of total revenues and GDS's performance in overseas markets was recognised in 2011 when it received a Queen's Award for Enterprise - International Trade.

GDS's unaudited accounts for the year ended 31 October 2011 show revenues of £4.9 million and pre-tax profits of £879,000. Operating profit adjusted to eliminate non-recurring items and to reflect Judges' practices would have amounted to £1.27 million. The accounts show net tangible assets of £1.7 million including cash of £809,000.

Financing of the Acquisition

The Acquisition and associated transaction costs are being financed by the Company's existing cash resources and by an extension of the facilities currently provided by Lloyds Bank Corporate Markets. The existing £2.5 million term loan has been replaced by a new £5 million term loan, repayable over a five year period and the overdraft facility has been increased from £0.5 million to £3.8 million. In addition, a new five year property loan of up to £2 million will be put in place (the "Property Loan"). The Property Loan will be secured on Judges' existing freehold property interests and a new factory in Laughton, East Sussex, which is to be developed shortly. The £2.4 million facility granted in March 2011 to finance the acquisition of a 51% indirect interest in Deben UK Limited remains unaltered.

The Board believes that this acquisition secures for Judges an excellent company, at the forefront of its niche market and with a competent and dedicated management team; it is expected that it will be immediately and significantly earnings enhancing.

The Board expects the preliminary announcement of the 2011 results to be released on 29 March.  

Alex Hambro, Chairman of Judges, commented:

"I am delighted that we have been able to purchase such a high quality business. This is Judges' largest acquisition in terms of sales and profits and we expect it to have a meaningful impact on our overall performance."

Enquiries:

David Cicurel, CEO, Judges Scientific: Tel: [phone]

Pascal Keane, Shore Capital: Tel: [phone]

Nadja Vetter, Cardew Group: Tel: [phone]

Websites:

Judges Scientific:www.judges.uk.com 

GDS: www.gdsinstruments.com

 

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