DET Deltron Elec.

RNS Number:5163U
Deltron Electronics PLC
22 November 2000



FOR IMMEDIATE RELEASE                                        22nd NOVEMBER 2000


DELTRON ELECTRONICS plc


*       PLACING AND OPEN OFFER OF 5,761,942 PLACING SHARES AT 140p
*       THE #3.8m AGREED ACQUISITION OF C&K AUSTRIA GmbH AND THE SENSORS
        BUSINESS OF SENSORTECH A/S
*       PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDING 30 SEPTEMBER 2000

Deltron Electronics plc ("Deltron"), the specialist Pan-European distributor
of electromechanical components and solutions, announces a fundraising of
approximately #7.5 million, net of expenses by way of a placing and open offer
of 5,761,942 Placing Shares at 140p per share. At the same time the Company
has pleasure in announcing that it has agreed terms for the acquisition,
subject to shareholder approval of, the entire issued share capital of C&K
Austria GmbH, and the business and assets of Sensortech A/S in Denmark.


C&K Austria GmbH is which is based in Austria, expands Deltron's European
reach. Its product range has predominantly the same franchises as the rest of
the Group, making assimilation a simple process. Geographically, however, it
is highly significant as it addresses both the Austrian market and provides
the traditional gateway to central Europe. Sensortech extends the coverage of
existing operations in Denmark, but, equally as important, it contributes a
range of sensor products which will take Deltron into this high growth market.
The plan is to roll out these products across the Group.


The Company has today also announced its Preliminary Audited Results for the
year ended 30th September 2000.  Profits before tax and goodwill amortisation
have increased 225% to #4.1m and turnover was up 42.3% to #54.3m. Deltron's
performance was driven by strong organic growth of 13% and 29% from
acquisitions. The momentum behind the Company's expansion looks to be
continuing with bookings at a record high of #60.4m, up 53% on the same time
last year.


If the Group's results had been expressed in Euros, a proxy for constant
currency, the performance would have appeared even stronger with bookings up
68% and organic turnover 24%.  A fuller analysis is included in the
accompanying preliminary results statement.


The fund-raising is designed to further accelerate this growth with the aim of
doubling the size of Deltron in two years. Becoming Pan-European has been
central to the current success. During the last 12 months Deltron has
developed its business through:



*       acquisitions - three over the last year in France (2) and Germany and
        the two announced today in Austria and Denmark

*       five pan-European distribution agreements - where Deltron has been
        appointed by leading Japanese and US manufacturers to handle            
       distribution of their products throughout  Europe.

*       by becoming a single European business solution for manufacturers/
        suppliers and customers.

The funds will be used for further acquisitions and to build greater
infrastructure to support customers with systems such as transparent stock
control and warehousing from all Deltron offices across Europe.

On completion of the above acquisitions, Deltron will have operations in
Scunthorpe, London, Denmark, France, Germany, Sweden, Ireland and Austria.

Full details of the Preliminary Results can be found in the statement issued
today.

Applications are personal to shareholders and may not be transferred except to
satisfy bonafide market claims.


For further information, please contact:

Deltron Electronics plc                       Tel: 01638 561156
Christopher Sawyer, Edward Tozer

Buchanan Communications                       Tel: 020 7466 5000
Tim Anderson/Bobbie Swanson


Background to Placing and Open Offer and use of funds

Since Deltron was admitted to the Official List in September 1996, it has
strengthened its position in the United Kingdom as well as significantly
expanding its European presence. The Group's expansion reflects both organic
growth as well as growth by acquisition.

Up to #3.9million of the net proceeds of the Placing and Open Offer will be
used as cash consideration for the Acquisitions in accordance with their
terms.  The balance of the funds raised will be used to reduce debt levels.
As a result the Group will be able to continue to pursue its strategy of
growth and development whilst maintaining an appropriate level of gearing.

Terms of the placing and open offer

The Placing and Open Offer will raise approximately #7.5million, net of
expenses.  Beeson Gregory, on behalf of the Company, is offering Qualifying
Shareholders 5,761,942 Placing Shares at 140p per share, payable in full on
acceptance, on the following basis:


                13 Placing Shares for every 50 Ordinary Shares


held on 17 November 2000, and so in proportion for any other number of
Ordinary Shares then held.  Under the terms of the Placing Agreement, Beeson
Gregory has agreed  conditionally to procure placees (save in respect of the
1,721,224 Placing Shares which an institutional Shareholder has irrevocably
undertaken to take up the Open Offer) or failing which to subscribe itself,
for the Placing Shares to the extent that they are not taken up under the Open
Offer.


The institutional Shareholder has entered into firm commitments to take up an
aggregate 1,721,224 Placing Shares under the Placing and Open Offer
representing 29.9 per cent of the Placing Shares.


The Directors have irrevocably undertaken not to take up their entitlements to
a total of 964,396 Placing Shares under the Open Offer.  These shares have
been placed firm with certain institutional and other investors.


The Placing Shares will, when issued and fully paid, rank pari passu in all
respects with the existing Ordinary Shares save that they will not rank for
the proposed final dividend of 2p Ordinary Share in respect of the Group's
financial year ended 30 September 2000.


Fractions of Placing Shares will not be allotted to Qualifying Shareholders
and, where necessary, entitlements will be rounded down to the nearest whole
number of Placing Shares.  Such fractional entitlements will be aggregated and
sold in the market for the benefit of the Company.  Application will be made
to the UK Listing Authority for the Placing Shares issued pursuant to the
Placing and Open Offer to be admitted to the Official List.  Application will
also be made to the London Stock Exchange for the Placing Shares to be traded
on the London Stock Exchange's market listed securities.  It is expected that
Admission of the Placing Shares will occur and dealings will commence on 19
December 2000.  The Placing and Open Offer is conditional on Admission of the
Placing Shares and on the Placing Agreement becoming unconditional in all
respects and not being terminated in accordance with its terms.

Expected timetable of principal events

                                                                           2000
Record Date for the Open Offer                             Close of business on
                                                                    17 November
Application Forms despatched                                        22 November
Latest time and date of splitting of Application Forms   3.00 pm on 11 December
(to satisfy bona fide market claims)
Latest time for receipt of forms of proxy                           13 December
Latest time and date for receipt of completed            3.00 pm on 13 December
Application Forms and payment in full
Extraordinary General Meeting                                       15 December
Dealings expected to commence in Placing Shares          8.00 am on 19 December
Stock accounts in CREST credited with Placing Shares             by 19 December
Despatch of definitive certificates for Placing Shares           by 19 December
Completion of Sensortech Acquisition                             by 31 December
Completion of C&K Austria Acquisition                        by 1 February 2001


The Company


The Group is a pan-European specialist distributor and manufacturer of
electromechanical and passive components.  These components include switches,
connectors, alarms/buzzers and electromagnetic compatibility ("EMC")
components.  Deltron is also a manufacturer of electromechanical products,
sub-assemblies and related tools/production aids.  These products and
sub-assemblies include EMC filters, a variety of connectors and other
interconnect devices.


The products distributed by the Group are used in a range of equipment from
medical systems to aeroplanes and motorcars; from mobile telephones and
computers to electric point of sale equipment and automatic cash dispensers;
and from recording studios to motor drive units.


The majority of these components are incorporated within customers' products
during the design stage of new products at the customer's location.
Representatives from Deltron help customers select and incorporate the most
suitable component into the design during the product development cycle; the
component is then referred to as being "designed-in".


Deltron concentrates on markets where its depth of product knowledge, combined
with its reputation for supplying specialist components, both for customised
service and for customer understanding, provide it with a competitive
advantage.


Company Performance


At flotation the Group's principal strategy was to develop as a pan-European
specialist supplier of electromechanical and passive components.  At that time
the objective was to supply a wide range of industrial customers in a variety
of industries whilst limiting exposure to any particular market, product or
supplier. The Directors believe that the Group has successfully pursued this
strategy. The Group currently operates in the United Kingdom, Germany, France,
Sweden, Denmark and Eire and the Directors believe that the Group currently
has representation in territories covering approximately 75 per cent. of the
European electronic component market. The Group also operates several
pan-European franchise agreements with a range of component manufacturers.


The acquisition in November 1999 of Deltron Components GmbH (formerly C&K
Components Vertriebsgesellschaft fur Elektronische Bauelemente mbH), a
distributor of electromechanical components based in Germany, provided the
Group with access to the German market, the largest electronic components
market in Europe, and was the first step towards establishing a presence in
the developing electronic components markets in Central Europe.


In November 1999, the Group also signed its first pan-European distribution
agreement with C&K Components Inc., a US switch manufacturer, and as a result
became responsible for the development of the sale of the C&K products
throughout the whole European market. Since then the Group has signed further
pan-European supply agreements with manufacturers including Grayhill Inc.,
Kycon Inc., Toko Inc. and Vitelec Electronics Limited and is in advanced
negotiations with others.  Other key supply contracts include those with the
Alps Electronic Company Limited, Samtec Inc. and Star Micronics Company
Limited.


Market Opportunities


The Group is seeking to develop its strategy of establishing a pan-European
distribution network structure further by:


*       adding to the number of European countries in which it operates;
*       strengthening its position with its existing European network; and
*       developing its product portfolio for supply through its European
        network


The European electronic components market is made up of three principle
product groups: active (e.g. semiconductors), passives (e.g. capacitors and
resistors) and electromechanical components (e.g. switches and connectors). In
1999 this market was worth approximately $47billion (#32.4billion) of which
approximately 24 per cent. was via distribution (source: M.E. Williams &
Associates).


The electromechanical components sector, in which the Group operates, has an
approximate  market size of $12billion (#8.3billion) in Europe and had a
compound annual growth rate over the three years to the end of 1999, of 6.3%.
The Group is not involved in the market for active components, which the
Directors consider to be more volatile and cyclical, relative to the markets
for electromechanical and passive components. These latter markets are
fragmented.

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