600 Group PLC Acquisition of remaining interest in TYKMA Inc. (4601T)
30 March 2016 - 5:00PM
UK Regulatory
TIDMSIXH
RNS Number : 4601T
600 Group PLC
30 March 2016
30 March 2016
The 600 Group Plc
The 600 Group PLC ("the Group"), the AIM listed distributor,
designer and manufacturer of industrial products (AIM: SIXH), is
pleased to announce that it has agreed the acquisition of the
remaining 20% of TYKMA Inc. ("TYKMA"), the US based laser marking
business it acquired 80% of in February 2015. The consideration
will be satisfied by the issue of 12,000,000 1p ordinary shares in
the Group ("Ordinary Shares") and $1.8m in cash. The cash
consideration will be funded by increased facilities from Bank of
America.
The fully integrated TYKMA Electrox Laser Division is led by
David Grimes who was the principal shareholder in TYKMA and who
remains as the Laser Division managing director. As part of the
transaction, David Grimes will receive 6,000,000 Ordinary Shares
and $990,000 for his remaining shares in TYKMA. Following the
completion of the transaction David Grimes will have an interest in
7,500,000 Ordinary Shares representing 7.19% of the enlarged issued
share capital of the Group. In the year to 31 December 2014 TYKMA
reported net operating income of $0.73m on revenues of $8.4m and
had net assets of $1m at that time. The acquisition also eliminates
the put and call in place on the remaining 20% of TYKMA, the value
of which was based upon a multiple of the combined Laser Division's
EBITDA. The combined Laser Division reported an operating profit of
GBP0.63m on revenues of GBP6.57m for the six months to 26 September
2015.
Under the AIM Rules for Companies, the purchase of the minority
stake in TYKMA from David Grimes is deemed to be a related party
transaction. Consequently, the Directors of the Group, having
consulted with Spark Advisory Partners Limited, as Nominated
Adviser to the Company, consider the purchase of the minority stake
in TYKMA from David Grimes to be fair and reasonable in so far as
the shareholders are concerned. In providing advice to the
Directors, Spark Advisory Partners Limited has taken into account
the Directors' commercial assessment of this related party
transaction.
Application will be made for the 12,000,000 new Ordinary Shares
to be admitted to trading on AIM and it is expected that admission
will take place on or around 6 April 2016. The new Ordinary Shares
will rank pari passu with the existing Ordinary Shares. Following
this allotment, the total issued share capital of the Group will
increase to 104,357,957 Ordinary Shares.
Commenting today, Paul Dupee Executive Chairman said:
'With the Laser Division now representing approximately 40% of
the Group's profitability, we are pleased to be able to acquire
100% ownership and at the same time align the interests of its
Divisional Managing Director, David Grimes, more closely with those
of existing shareholders. TYKMA has consistently traded strongly
since we acquired it over a year ago and the management team has
done well to integrate operations in the UK and US as well as
improving manufacturing efficiencies and driving sales growth to
gain market share and accelerate profit growth and we are confident
this will continue.'
'We're also pleased to report that trading conditions in our
Machine Tools Division have improved in the last six weeks with
stronger order books in both the US and Europe and some initial
success through the new distributors we have established in S.E.
Asia. Although it is difficult to anticipate if this will continue
given the fragile economic conditions in many of the market we
serve, we remain well positioned for growth wherever that may
arise.'
About TYKMA Electrox
TYKMA Electrox is headquartered in Chillicothe, Ohio, USA and
specialises in the design, production and distribution of
industrial laser systems for a broad range of industrial
manufacturing applications. These industrial laser systems are used
for marking, traceability, branding, component identification and
material processing on metals, carbide, painted or anodized
materials, most plastics and many other substrates and have been
incorporated into the production processes of numerous global
companies operating in a variety of sectors including electronics,
medical, tooling and automotive.
Enquiries:
The 600 Group PLC Tel: 01924 415000
Paul Dupee, Executive
Chairman
Neil Carrick, Finance
Director
Spark Advisory Partners Tel: 020 3368 3553
Limited (NOMAD)
Sean Wyndham-Quin/
Miriam Greenwood
Cadogan PR Limited Tel: 020 7499 5002 / 07771
(Financial PR) 713608
Alex Walters
FinnCap (Broker) Tel: 020 7600 1658
Tony Quirke/Mia Gardiner
(Sales/Broking)
More information on the Group can be viewed at:
www.600group.com
This information is provided by RNS
The company news service from the London Stock Exchange
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