TIDMDSCV
RNS Number : 8772H
discoverIE Group plc
01 August 2023
1 August 2023
discoverIE Group plc
Acquisition of Silvertel
discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a
leading international designer and manufacturer of customised
electronics to industry, today announces the acquisition of Silver
Telecom Limited ("Silvertel") , for an initial cash consideration
of GBP21m on a debt free, cash free basis, before expenses, which
will be funded from the Group's existing debt facilities. In
addition, an earn-out of up to GBP23m will be payable subject to
Silvertel's performance over the next four years. Completion of the
acquisition is subject to approval under the UK National Security
& Investment Act, which is expected to be received later this
quarter.
Founded in 1997, Silvertel is a UK-based designer and
manufacturer of differentiated, high performance
Power-over-Ethernet ("PoE") modules and complementary products for
global industrial electronic connectivity markets closely aligned
with the Group's target markets. Silvertel, which is based in
Newport in South Wales and sells its products in over 70 countries,
will be part of the Magnetics & Controls division and will
retain its distinct brand identity.
Silvertel delivered an exceptional performance in the year to 28
February 2023, with revenues of GBP13.5m and pre-tax profit of
GBP4.4m, with gross assets of GBP4.6m. Performance in the current
year is expected to be closer to the 2022 financial year, where the
business reported revenues of GBP8.4m and pre-tax profit of
GBP2.2m.
The acquisition is expected to be immediately accretive to
underlying earnings and underlying operating margin. Following
completion of the acquisition, the Group's proforma gearing(1) as
at 31 March 2023 increases from 0.7 to 1.0x. This remains well
below the long-term target range of between 1.5 and 2.0x, leaving
capacity for further acquisitions. The pipeline of acquisition
opportunities in development remains strong.
Nick Jefferies, Group Chief Executive of discoverIE plc,
said:
"The acquisition of Silvertel continues our strategy of building
a differentiated, international, growth focused electronics group
with strong operating margins. The transaction brings another high
quality business with strong alignment to our target markets into
discoverIE, which is accretive to both underlying earnings and
margins.
Silvertel has an excellent product range that is highly
complementary to our existing Group and will gain access to our
wider range of industrial connectivity target customers. We are
looking forward to welcoming the Silvertel team to the discoverIE
Group."
For further information please contact:
discoverIE Group plc 01483 544 500
Nick Jefferies, Group Chief Executive
Simon Gibbins, Group Finance Director
Lili Huang, Head of Investor Relations
Buchanan 020 7466 5000
Chris Lane, Toto Berger, Jack Devoy
discoverIE@buchanan.uk.com
Notes
1. Gearing ratio is defined as net debt divided by underlying
EBITDA (annualised for acquisitions, excluding IFRS16).
2. Silvertel is owned by retired co-founder Chris Green, Steve
Edwards (co-founder and CEO),and a number of minority shareholders.
Steve Edwards will remain in the business as Chairman. The current
COO, Sean Edwards, will manage the company as its new Managing
Director..
3. The information contained within this announcement is deemed
by the Group to constitute inside information as stipulated under
the Market Abuse Regulation, Article 7 of EU Regulation 596/2014.
Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to
be in the public domain.
Notes to Editors:
About discoverIE Group plc
discoverIE Group plc is an international group of businesses
that design and manufacture innovative electronic components for
industrial applications.
The Group provides application-specific components to original
equipment manufacturers ("OEMs") internationally through its two
divisions, Magnetics & Controls, and Sensing &
Connectivity. By designing components that meet customers' unique
requirements, which are then manufactured and supplied throughout
the life of their production, a high level of repeating revenue is
generated with long-term customer relationships.
With a focus on sustainable key markets driven by structural
growth and increasing electronic content, namely renewable energy,
medical, electrification of transportation, and industrial
automation & connectivity, the Group aims to achieve organic
growth that is well ahead of GDP and to supplement that with
complementary acquisitions. The Group is committed to reducing the
impact of its operations on the environment with an SBTi aligned
plan to reach net zero. With its key markets aligned with a
sustainable future, the Group has been awarded an ESG "AA" rating
by MSCI and is Regional (Europe) Top Rated by Sustainalytics.
The Group employs c.4,700 people across 20 countries with its
principal operating units located in Continental Europe, the UK,
China, Sri Lanka, India and North America.
discoverIE is listed on the Main Market of the London Stock
Exchange and is a member of the FTSE250, classified within the
Electrical Components and Equipment subsector.
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END
ACQEFLBBXVLZBBB
(END) Dow Jones Newswires
August 01, 2023 02:00 ET (06:00 GMT)
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