Business
Disposal of Agar Scientific
Disposal of Agar Scientific.
About this update from Checkit Plc
[{"type":"text","content":"\n \nRNS Number : 9380Y Elektron Technology PLC 23 May 2016 \n\nElektron Technology plc\n(AIM: EKT, \"Elektron\", the \"Company\" or the \"Group\")\n \nDisposal of Agar Scientific\nElektron Technology plc, the global technology group, has completed on the sale of its wholly owned subsidiary, Agar Scientific Limited (\"Agar\"), to an MBO vehicle financed by funds managed by Foresight Group, for a total gross consideration of approximately £2.3 million cash of which £2.0 million was received on completion and £0.3 million is due subject to adjustment per the forthcoming completion accounts. The price is subject to an upwards or downwards adjustment in respect of working capital based on a target figure of £0.25 million at completion. Elektron has agreed to provide support to Agar Scientific Limited via a back to back sublease of its existing facility. Rent payable is £56,000 per annum and the head lease expires in 2024.\n \nAgar is a leading distributor of microscopy consumables with an increasing share of its turnover being generated via ecommerce.\n \nIn the year ended 31 January 2015 the business of Agar traded as a brand within Elektron Technology Limited (\"ETUK\") with sales of £3.48 million and 'Brand Contribution' of £0.61 million. Brand Contribution is an internal measure of profitability before the allocation of certain Group pooled costs such as finance, information technology and human resources. After making a deduction for a fair share of these costs the Board estimates Agar's operating profit to be £0.24m for the year ended 31 January 2015. As at 31 January 2016, when the business and assets were transferred from ETUK to Agar, tangible net assets excluding intercompany borrowings were £0.73 million.\n \nThe cash proceeds will be used by Elektron to reduce borrowings and for working capital purposes. The disposal will be dilutive of earnings initially but the Board aims to improve the performance of the remaining businesses.\n \nThe disposal is part of the Group's rationalisation of its portfolio, focusing its investment on the core segments of Connectivity, IMC (Instrumentation, Monitoring and Control) portfolio and Checkit. Elektron is continuing to transform its business, building a technology led company through its strategy of innovation, streamlining operations and investing...