Source - Alliance News

SDI Group PLC on Friday reported the acquisition of Gloucestershire, England-based Severn Thermal Solutions Ltd, as it continues to pursue its acquisitive growth strategy.

The Cambridge, England-based maker of scientific and technology products for digital imaging and sensing control applications said it has acquired Severn Thermal Solutions, a designer and manufacturer of high temperature furnace systems and environmental chambers for advanced material processing and testing.

The net consideration of the transaction is £4.75 million, excluding the £3.75 million of cash acquired under the transaction.

Broken down, the transaction includes a £7.8 million cash consideration payable on completion, a £480,000 deferred cash consideration expected to be paid shortly after completion and gross and net cash acquired of £3.6 million.

SDI said the initial cash consideration will be funded from its revolving credit facility with HSBC UK Bank.

Its shares climbed 11% to 79.00 pence on Friday morning in London.

SDI anticipates the acquisition being immediately earnings enhancing, adding that Severn Thermal Solutions is a profitable business that will provide it with expansion into the controlled environment market.

For the year to September 30, said SDI, Severn Thermal Solutions reported £2.4 million in revenue, earnings before interest and tax of £1.1 million, and adjusted Ebit of £880,000.

SDI Chief Executive Stephen Brown said: ‘Severn is a growing, profitable business, aligning with our key investment criteria of targeting scientific and industrial niche markets with global reach. Severn benefits from a strong, experienced management team who will remain in place, maintaining its sustainable sales pipeline, supported by significant international exposure.

‘We are excited by the prospects for this acquisition, both as a standalone entity and in the cross-sell opportunities to other businesses across the group. We continue to pursue our acquisitive growth strategy alongside our organic growth programme.’

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