DiscoverIE Group PLC splashed out £77mln on acquisitions in the US and UK to strengthen and broaden its presence in the customised electronic components sector.

US firm Logic PD Inc (known as Beacon) makes embedded computing boards and is being acquired for £80.5mln (£58.8mlm) cash.  

The business made sales of US$28.1mln in 2020 and an underlying profit of US$6.8mln.

Antenova, meanwhile, is a UK firm that makes antenna and radio frequency modules and is being acquired for £18.2mln.

Its sales this year are expected to be £8mln with underlying profits of £2.3mln.

DiscoverIE will help fund the deals through a £55mln placing at 1,028p that closed last night.

Originally, DiscoverIE intended to raise £45mln but such was the demand from investors it increased the size of the offer.

In its statement, the company said the two purchases will expand its footprint significantly in North America and increase revenues from outside Europe for the Design & Manufacturing division to 40% and to 31% for the group overall.

Both acquired businesses generate operating margins in excess of 20%, the statement added, and would have raised margins by 0.8 percentage points last year on a proforma basis as well as being immediately earnings enhancing.

Nick Jefferies, DiscoverIE’s chief executive, added: “The earnings accretive acquisitions of Beacon EmbeddedWorks and Antenova continue our strategy of building a high quality, high margin international group that designs and manufactures differentiated and customised electronics.

“Both Beacon and Antenova have long-established track records of supplying high-quality products, mostly into our core target markets, and are therefore well-positioned to exploit a range of growth opportunities.”



Source link