TIDMSOLI
RNS Number : 8351G
Solid State PLC
09 November 2018
Solid State plc
("Solid State", the "Company" or the "Group")
Acquisition of Optoelectronics & Displays specialist -
Pacer Technologies Limited
Solid State plc (AIM: SOLI), the AIM listed manufacturer of
computing, power and communications products, and value added
distributor of electronic components, is pleased to announce the
acquisition of Pacer Technologies Limited and its subsidiaries
("Pacer") (the "Acquisition").
The Company has exchanged contracts to acquire the entire share
capital of Pacer Technologies Limited for a cash consideration of
GBP3.73m, subject to a net asset adjustment. The consideration is
being settled out of the Group's existing resources and new banking
facilities provided by Lloyds Bank plc.
Highlights of the Acquisition include:
-- Pacer is well established in the specialist markets of Optoelectronics and Displays
-- The Acquisition significantly enhances Solid State's exposure to the niche Medical sector
-- Pacer focuses on value added component distribution and
custom design, targeting enhanced margin opportunities
-- The Acquisition will enable the enlarged Group to further
design and manufacture own brand products for distribution
utilising Pacer's recent investment in a new value added production
facility in Weymouth
-- Pacer has an established US subsidiary
-- Pacer generates circa 40% of its revenues from overseas
-- Consideration is being satisfied out of Group resources and a new term loan facility
-- The Acquisition is expected to be earnings enhancing in the first full year
-- Pacer operates at higher gross margins than the Group's traditional distribution business
-- Pacer will form part of the Group's Distribution division, operating as a separate company
-- The Acquisition gives the Group greater scale, strength and depth in high growth markets
For the year ended 31 March 2018, Pacer reported revenue of
GBP15.2m, and a profit before tax of GBP431k. As at 31 March 2018
Pacer had net assets of GBP1.06m and had net debt of GBP1.5m.
Introduction to Pacer Technologies Limited:
Pacer was established in 1989 to specialise in the distribution
and custom design of optoelectronic components, lasers and displays
to the OEM market in the medical, military, commercial, industrial
and security sectors. Serving an international client base, Pacer
has a reputation for supplying high quality components in a
customer-centric manner, often involving custom design and
manufacturing to address individual needs.
Pacer operates in two areas, Components and Displays, supplying
world class blue chip companies. The Components business is
distribution based with a smaller proportion of its sales derived
from manufacturing, own brand and assembly based products. Products
include industrial LEDs and light sources, lasers and laser range
finders, photon detection and counting equipment. The Displays
business complements and enhances that of Solid State Supplies.
Products include industrial and commercial grade displays.
In the UK, Pacer operates from offices in Pangbourne and
Weymouth, with a sales office in Crawley. Its US subsidiary is
based in Florida.
Banking:
In completing this deal, the Group's primary banker Lloyds Bank
plc has put in place committed facilities made up of GBP6.0m of
term loans and a GBP3.5m revolving credit facility to fund the
consideration and the working capital requirements of the enlarged
Group.
These facilities have enabled the Group to refinance Pacer's
GBP3.5m invoice discounting and term loan facilities on better
terms. Pacer net debt at 31 March 2018 was GBP1.5m. Principally due
to the capital investment undertaken by Pacer since that date, net
debt is expected to be higher than this on completion of the
Acquisition.
Commenting on the Acquisition, Gary Marsh, Chief Executive of
Solid State, said:
"Pacer is a company that we have known and admired for many
years. Their expertise and product set are complementary to the
existing Solid State Group, with the added benefit of enhancing the
value added operations and increasing exposure to high growth
markets such as the medical sector. In addition, Pacer has an
established US business which provides the Group with an
opportunity to further develop its US activities.
"The two businesses share many cultural similarities, including
the specialist sales force approach, which means that client design
teams are talking to like-minded engineers.
"We look forward to welcoming the Pacer team to Solid State
where we believe they will further grow as part of the enlarged
Group."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information please contact:
Solid State plc 01527 830 630
Gary Marsh - Chief Executive investor.information@solidstateplc.com
Peter James - Group Finance Director
WH Ireland (Nominated Adviser & Joint
Broker) 0117 945 3470
Mike Coe / Chris Savidge (Corporate
Finance)
Jasper Berry / David Kilbourn (Corporate
Broking / Sales)
finnCap (Joint Broker)
Ed Frisby (Corporate Finance)
Rhys Williams (Corporate Broking /
Sales) 020 7220 0500
Walbrook PR (Financial PR) 020 7933 8780
Tom Cooper / Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Solid State plc (SOLI) is a leading value added group of
companies providing specialist distribution, design-in and
manufacturing services to those acquiring computing, power and
communications products; and electronic and optoelectronic
components; for use in harsh environments.
Serving niche markets in oil & gas production, medical,
construction, security, military and field maintenance, Solid State
acts as both a component supplier to OEMs and bespoke manufacturer
of specialist units to clients with complex requirements.
Headquartered in Redditch, Solid State employs over 200 staff
across the UK with a sales office in the USA. Solid State operates
through two main divisions: Manufacturing and value added
Distribution.
Solid State was established in 1971 and admitted to AIM in June
1996.
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.
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.
END
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