Stadium Group Plc (AIM: SDM), a leading electronic technologies group, announces that it has conditionally agreed to acquire Stontronics, a UK based manufacturer and distributor of power supply units, transformers and adaptors, for a total consideration of up to £6.5 million to be satisfied in cash.
The Acquisition is in accordance with the Company’s strategy of making targeted, complementary acquisitions which strengthen the Company’s integrated technology offering, as well as providing synergies and cross-selling opportunities across the Group. Stontronics will augment the Group’s existing power products capabilities and the enlarged business will strengthen Stadium’s overall technology offering.
- Conditional agreement to acquire the entire issued share capital of Stontronics
- Total maximum consideration of £6.5m to be satisfied by:
- £5.5m of initial consideration in cash – subject to certain adjustments
- Up to £1.0m of deferred consideration in cash – contingent on achievement of future financial targets
- Proposal to raise £6.0m (before the deduction of fees and expenses) to fund the Acquisition through:
- Firm Placing of 4,540,647 New Ordinary Shares at an issue price of 110p per share
- Placing and Open Offer of 913,899 New Ordinary Shares at an issue price of 110p per share
- Qualifying Shareholders can subscribe for 1 Open Offer Share for every 34 Existing Ordinary Shares held, with the possibility of acquiring additional Open Offer Shares through the Excess Application Facility
- The Acquisition, Firm Placing, and Placing and Open Offer are conditional, inter alia, on Shareholder approval
- The Circular is expected to be posted to Shareholders today
- General Meeting to be held at 11.00 a.m. on 13 August 2015
Stontronics, founded in 1988, is a private company based in Reading with circa 30 employees. It is a distributor and manufacturer of transformers, adaptors and power supply units, providing a power solution service to its customers. The Board believes that Stontronics’ key strength is its ability to provide customers with high quality customised, semi-customised or standard power products either through distribution partners or from its own manufacturing site, with a bespoke design service, which is provided through its relationship with several of its Asian suppliers and supported by its own in-house design capability.
Stontronics has a direct sales team, which is focused on providing a power solution service to the industrial equipment and instrumentation market predominantly in the UK. Products are sold to over 500 customers, with coverage into Europe and North America, who comprise both end users and also distribution partners, including tier one catalogue distribution customers.
On completion of the Acquisition, two of the Vendors, Terry Branston and Paul Branston, will be retained in senior management roles for varying periods of time to assist with the handover and integration of Stontronics into the Group.
As at 30 September 2014, Stontronics had net assets of c. £0.47 million, and generated an operating profit of £0.61 million in the year ended 30 September 2014 from revenues of £4.94 million. The Board expects the combined effect of the Acquisition and the Fundraising to be earnings neutral in the 2016 financial year.