TIDMCML
RNS Number : 3403O
CML Microsystems PLC
02 October 2023
2 October 2023
CML Microsystems Plc
("CML", the "Company" or the "Group")
Completion of Microwave Technology, Inc Acquisition
CML, which develops mixed-signal, RF and microwave
semiconductors for global communications markets, is pleased to
announce that it has, today, completed the acquisition of Microwave
Technology, Inc. ("MwT") (the "Acquisition").
Background to Microwave Technology, Inc.
Founded in 1982, MwT is a recognised leader in the design,
manufacturing and marketing of GaAs and GaN Based MMICs, Discrete
Devices, and Hybrid Amplifier Products for Commercial Wireless
Communication, Defence, Space, and Medical (MRI) applications. It
became part of the IXYS Corporation, which was then acquired in
2018 by Littelfuse, Inc., the global technology manufacturing
company headquartered in Chicago. In 2019, MwT undertook a
management buy-out from Littelfuse, at the same time transitioning
away from manufacturing to a fabless semiconductor model with a
specific focus on MMICs. The business currently consists of 20
employees and operates from Fremont, California.
The Acquisition
The Acquisition expands the Group's product portfolio,
strengthens and enhances its support resources and increase its
R&D capabilities, providing essential knowhow and experience in
system level understanding, product manufacturing and packaging
techniques. MwT's products are complementary to CML's existing
offering and the majority of its focus and client concentration is
within the USA. The Board of CML believes there is a significant
opportunity to increase its current market share by
internationalising MwT's products.
The total consideration payable for the Acquisition is $13.18m,
of which $7.65m is payable in cash and $5.53m is payable in shares.
The cash element, which is subject to customary post-completion
adjustments, is payable in four tranches; with $1.93m payable on
completion, $1.17m payable on the six-month anniversary of
completion, $2.65m payable on the first anniversary of completion
and $1.90m payable on the second anniversary of completion (with
the latter three payments being subject to performance related
adjustments). The $5.53m share element of the consideration is
payable via the issue to the sellers of 864,349 new CML ordinary
shares of 5 pence each ("Ordinary Shares"), valued at a price of
440 pence per share, being the volume-weighted average price of
CML's shares for the 30 days prior to the initial announcement of
the transaction on 17 January 2023, to be issued in three tranches
(the "Consideration Shares"). 592,010 Consideration Shares will be
issued on completion (the "Initial Consideration Shares"), 90,780
Consideration Shares will be issued on the first anniversary of
completion, 90,780 Consideration Shares will be issued on the
second anniversary of completion and 90,779 Consideration Shares
will be issued on the third anniversary of completion.
Chris Gurry, CML's Group Managing Director commented: "We are
delighted to finally welcome MwT into the CML Group. Their
dedicated and very experienced team will accelerate our multi-year
growth strategy, enhancing the Group's existing competencies,
whilst the strong cultural synergies bode well for the combined
businesses over the medium term."
MwT's unaudited US GAAP results for the 12-month period to 31
December 2022 recorded revenue of $6.5m and a pre-tax loss of $132k
with net assets of circa $2.4m. The Board expects that MwT will be
earnings enhancing in its first full year of ownership within
CML.
It is intended that Dr. Nathan Zommer, who was previously MwT's
majority shareholder and is MwT's current Chairman, will join the
CML Board of Directors in a non-executive capacity.
Dr. Zommer's appointment to the Board is subject to completion
of normal regulatory due diligence checks. A further announcement
confirming his appointment on completion of normal regulatory due
diligence checks and disclosing information in respect of Schedule
2(g) of the AIM Rules will be made in due course.
No further information is required to be disclosed as per
Schedule 4 in the AIM Rules for Companies.
Total Voting Rights
Application has been made to the London Stock Exchange for the
592,010 Initial Consideration Shares to be admitted to trading on
AIM, which is expected to occur on 3 October 2023.
In conformity with the Financial Conduct Authority's Disclosure
and Transparency rules, CML Microsystems Plc hereby notifies the
market that following the issue of the Initial Consideration
Shares, the Company's issued share capital comprises 16,504,754
ordinary shares of 5p each. The total number of treasury shares
held is 360,675 which do not carry voting rights.
The total number of voting rights in the Group is therefore
16,144,079 (which excludes ordinary shares held by the Group in
treasury).
This figure may be used by shareholders as the denominator for
the calculation by which they will determine if they are required
to notify their interest in, or a change in their interest in, the
Group under the FCA's Disclosure and Transparency Rules.
The information contained within this announcement is deemed by
the Group to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
CML Microsystems Plc
Chris Gurry, Group Managing Tel: +44(0)1621 875 500
Director
Nigel Clark, Executive Chairman
Shore Capital Tel: +44(0)20 7408 4090
Toby Gibbs
James Thomas
Lucy Bowden
Fiona Conroy (Corporate Broking)
Alma PR Tel: +44 (0)20 3405 0212
Josh Royston
Andy Bryant
Matthew Young
About CML Microsystems Plc
CML develops mixed-signal, RF and microwave semiconductors for
global communications markets. The Group utilises a combination of
outsourced manufacturing and in-house testing with trading
operations in the UK, Asia and USA. CML targets sub-segments within
Communication markets with strong growth profiles and high barriers
to entry. It has secured a diverse, blue chip customer base,
including some of the world's leading commercial and industrial
product manufacturers.
The spread of its customers and diversity of the product range
largely protects the business from the cyclicality usually
associated with the semiconductor industry. Growth in its end
markets is being driven by factors such as the appetite for data to
be transmitted faster and more securely, the upgrading of telecoms
infrastructure around the world and the growing prevalence of
private commercial wireless networks for voice and/or data
communications linked to the industrial internet of things
(IIoT).
The Group is cash-generative, has no debt and is dividend
paying.
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END
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October 02, 2023 03:54 ET (07:54 GMT)
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