TIDMSDI
RNS Number : 3481H
SDI Group PLC
03 December 2020
SDI Group plc
("SDI", the "Company" or the "Group")
(AIM: SDI)
Acquisition of Monmouth Scientific Limited
and Total Voting Rights
SDI Group plc, the AIM quoted Group focused on the design and
manufacture of scientific and technology products for use in
digital imaging and sensing control applications, is pleased to
announce the acquisition on 2 December 2020 of Monmouth Scientific
Limited ("Monmouth Scientific"), a UK manufacturer of biological
safety cabinets, fume cupboards, laminar flow cabinets and
cleanrooms (the "Acquisition"). Total consideration, including
earnout, is forecast to be approximately GBP5.8 million, net of
cash acquired.
Highlights:
-- Monmouth Scientific specialises in providing controlled clean
air environments for scientific, medical and other technical
applications
-- The company is currently benefiting from high levels demand
for its solutions for COVID-19 testing infrastructure
-- Expected to move to new larger purpose-built premises in 2022
-- Acquisition expected to be immediately earnings enhancing
Ken Ford, Chairman of SDI said: "Monmouth Scientific is a
further step in our Group growth strategy. It is a complementary
fit with our stable of businesses providing laboratory equipment,
and generates areas for potential growth. The Acquisition is
expected to be immediately earnings enhancing. We are delighted to
welcome David Pomeroy and his team into the Group."
About Monmouth Scientific
Monmouth Scientific specialises in the design, manufacture and
service of clean air solutions for a variety of scientific, medical
and other technical sectors, protecting the purity of the air for
both the controlled activity and for the operator. Principal
products are biological safety cabinets, fume cupboards, laminar
flow cabinets, bespoke and modular cleanrooms, and related
items.
For the year ended 31 March 2020, Monmouth Scientific achieved
revenues of GBP6.2 million, and EBIT of GBP0.4 million (unaudited)
and for the six months ended 30 September 2020, the company
achieved revenues of GBP3.7 million and EBIT of GBP0.8 million
(unaudited), adjusted to eliminate non-recurring items and to
reflect Monmouth Scientific's ongoing cost base within the Group
(year ended 31 March 2020, unaudited statutory profit before tax of
GBP0.28 million).
Approximately 80 per cent. of Monmouth Scientific's sales are to
UK customers. The COVID-19 pandemic has generated a significant
surge in demand for the company's biological safety cabinets which
is expected to continue for the rest of its financial year.
Based in Bridgwater, Somerset, Monmouth Scientific was founded
in 2003 by David & Lisa Pomeroy and employs approximately 65
staff. David will continue to lead the company within the SDI
Group.
Monmouth Scientific is outgrowing its current premises and is
expected, following the Acquisition, to contract for new and larger
purpose-built leased premises locally which have already been
identified, and which will enable operating efficiency and
production expansion.
Acquisition rationale
The Acquisition is in line with the Group's strategy of
acquiring businesses with complementary scientific and technology
products, with capable management teams in place and with
opportunities to grow further under the SDI Group structure.
Monmouth Scientific is expected to join SDI's Sensors and Controls
reporting segment. Excluding current COVID-19 led demand, the SDI
Board considers that there are long term growth drivers for
Monmouth Scientific's products and services.
Consideration for the Acquisition
Total consideration is estimated at GBP5.8 million, excluding
cash acquired, and consists of:
-- Initial consideration of GBP2.66 million, of which GBP2.46
million in cash and GBP200,000 in SDI ordinary shares ("Ordinary
Shares") equating to 230,680 shares issued at 86.7 pence per share,
being the average mid-market closing price for the five business
days prior to the date of this announcement. The shares issued are
subject to a one-year lock-in agreement*;
-- A payment in cash shortly after completion, equivalent to the
net tangible assets of Monmouth Scientific at completion, currently
estimated at GBP1.6 million and which net tangible assets are
estimated to include c.GBP0.6 million of cash and no bank debt
(subject to completion accounts); and
-- An earnout cash payment, payable after 31 March 2021,
currently estimated at GBP2.1 million.
The total consideration is capped at GBP6.94 million (including
estimated GBP0.6 million of cash acquired), and this would be
payable based on Monmouth Scientific achieving adjusted EBIT for
the year to 31 March 2021 in excess of GBP1.9 million.
The cash consideration will be funded from existing cash
resources and from the Group's existing revolving credit facility
with HSBC UK Bank. At 31 October 2020, the Group had cash of GBP3.4
million (unaudited), net debt of GBP0.3 million (unaudited)
(excluding IFRS16 lease liabilities), and GBP5.0 million of undrawn
bank facility.
Issue of new Ordinary Shares and Total Voting Rights
As referred to above, as part of the consideration for the
Acquisition, SDI has issued 230,680 new Ordinary Shares.
Application will be made to the London Stock Exchange for the
230,680 new Ordinary Shares to be admitted to trading on AIM
("Admission") and it is expected that Admission will become
effective and trading will commence at 8.00 a.m. on 9 December
2020.
The total number of Ordinary Shares in issue is now 98,017,964
and the total number of voting rights is therefore 98,017,964. This
figure may be used by shareholders as the denominator for the
calculations by which they determine if they are required to notify
their interest in, or a change to their interest in, the share
capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Enquiries
SDI Group plc 01223 320480
Ken Ford, Chairman
Mike Creedon, CEO
Jon Abell, CFO
www.thesdigroup.net
finnCap Ltd 020 7220 0500
Ed Frisby/Kate Bannatyne - Corporate Finance
Andrew Burdis/Sunila de Silva - ECM
JW Communications 07818 430877
Julia Wilson - Investor & Public Relations
About SDI Group plc:
SDI designs and manufactures scientific and technology products
for use in digital imaging and sensing and control applications
including life sciences, healthcare, astronomy, manufacturing,
precision optics and art conservation. SDI operates through its
company divisions: Atik Cameras, Synoptics, Graticules Optics,
Sentek, Astles Control Systems, Applied Thermal Control, MPB
Industries, Chell Instruments and Monmouth Scientific.
SDI continues to grow by developing its own technology
advancements and by improving its global sales channels, as well as
through pursuing strategic, complementary acquisitions.
www.thesdigroup.net
No statement in this announcement is intended to be a profit
forecast or estimate and no statement in this announcement should
be interpreted to mean that earnings per share of the Company for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of the
Company.
*Lock-in Agreement: No disposals of Ordinary Shares without the
prior consent of the Company.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQUUAWRRSUURAA
(END) Dow Jones Newswires
December 03, 2020 02:00 ET (07:00 GMT)
Sdi (LSE:SDI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sdi (LSE:SDI)
Historical Stock Chart
From Jul 2023 to Jul 2024
