TIDMDSCV
RNS Number : 5229H
discoverIE Group plc
04 December 2020
7.00am, 4 December 2020
discoverIE Group plc
Acquisition of Limitor GmbH
discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a
leading international designer, manufacturer and supplier of
customised electronics to industry, today announces the acquisition
of Limitor GmbH ("Limitor").
Limitor, a designer and manufacturer of thermal safety
components and sensors, is being acquired, subject to certain
regulatory approvals, for an initial cash consideration of EUR14.5m
on a debt free, cash free basis, before expenses, funded from the
Group's existing debt facilities. In addition, a contingent payment
of up to EUR3.5m will be payable subject to the business achieving
certain profit growth targets over the next three years.
Regulatory approvals are expected to be received during the
final quarter of this financial year. Once completed, the
acquisition is expected to be enhancing to Group underlying
earnings as well as accretive to the Group's underlying operating
margin.
Limitor, founded in 1979, designs and manufactures custom
thermal safety components for industrial markets. Its products
comprise temperature and current sensors, limiters and thermal
switches, which are used in a range of industrial applications
including a number of niche segments in the Group's target markets.
Around 85% of its sales are within Europe, with 15% being into the
US, Asia and other non-EU markets. The business, which is based in
Urbach, Germany with manufacturing facilities in Pécs in Hungary,
will operate within the Group's Variohm cluster of specialist
sensor businesses as part of the Design & Manufacturing
division whilst retaining its distinct brand identity.
The business has performed consistently well over recent years,
with revenues for the year ended 31 December 2019 of EUR8.2m
generating a reported pre-tax profit of EUR1.7m, and an operating
margin of 21%. Gross assets at 31 December 2019 were EUR3.9m.
Trading over the last twelve months has also been resilient.
Limitor will be acquired from its three joint shareholders and
managing directors, Mr A. Rudolph, Mr A. Fischer and Mr U.
Angermaier. Mr Rudolph, the sales director and Mr Fischer, the
production director, will continue in their roles while Mr
Angermaier, the finance director, plans to retire following a
period of transition.
Following completion of the acquisition, the Group's proforma
gearing(1) as at 30 September 2020, the Group's most recent six
month period end, increases from 1.2x to 1.45x, remaining below our
long term target range of between 1.5 and 2.0x, leaving capacity
for further acquisitions.
Nick Jefferies, Group Chief Executive of discoverIE plc,
said:
"The acquisition of Limitor continues our strategy of building a
differentiated, international, growth focused electronics Group
with strong operating margins and will be accretive. Limitor has a
long-established track record of manufacturing and supplying high
quality custom sensors internationally, principally for safety
applications.
Operating within our Variohm cluster of sensor businesses, it
will gain access to our wider base of customers and with it, new
sales opportunities in our target markets. We are delighted to
welcome the Limitor team into discoverIE Group."
For further information please contact:
discoverIE Group plc 01483 544 500
Nick Jefferies, Group Chief Executive
Simon Gibbins, Group Finance Director
Buchanan 020 7466 5000
Chris Lane, Toto Berger, Charlotte Slater
discoverIE@buchanan.uk.com
Notes
1. Gearing ratio is defined as net debt divided by underlying
EBITDA (annualised for acquisitions).
2. 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 designs, manufactures and supplies innovative components for
electronic applications.
The Group provides application-specific components to original
equipment manufacturers ("OEMs") internationally. 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 key markets driven by structural growth and
increasing electronic content, namely renewable energy,
transportation, medical and industrial & connectivity, the
Group aims to achieve organic growth that is well ahead of GDP and
to supplement that with targeted complementary acquisitions.
The Group employs c.4,200 people and its principal operating
units are located in Continental Europe, the UK, China, Sri Lanka,
India and North America.
The Group is listed on the Main Market of the London Stock
Exchange and is in the top quartile of the FTSE Small Cap Index,
classified within the Electrical Components and Equipment
subsector, and has revenues of over GBP450m. Over the last five
years, underlying earnings per share almost doubled.
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END
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December 04, 2020 02:00 ET (07:00 GMT)
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