Business
Acquisition of Silvertel
Acquisition of Silvertel.
About this update from Discoverie Group Plc
[{"type":"text","content":"\n\n\n1 August 2023\n \n \ndiscoverIE Group plc\n \nAcquisition of Silvertel \n \n \ndiscoverIE Group plc (LSE: DSCV, \"discoverIE\" or the \"Group\"), a leading international designer and manufacturer of customised electronics to industry, today announces the acquisition of Silver Telecom Limited (\"Silvertel\"), for an initial cash consideration of £21m on a debt free, cash free basis, before expenses, which will be funded from the Group's existing debt facilities. In addition, an earn-out of up to £23m will be payable subject to Silvertel's performance over the next four years. Completion of the acquisition is subject to approval under the UK National Security & Investment Act, which is expected to be received later this quarter. \n \nFounded in 1997, Silvertel is a UK-based designer and manufacturer of differentiated, high performance Power-over-Ethernet (\"PoE\") modules and complementary products for global industrial electronic connectivity markets closely aligned with the Group's target markets. Silvertel, which is based in Newport in South Wales and sells its products in over 70 countries, will be part of the Magnetics & Controls division and will retain its distinct brand identity.\n \nSilvertel delivered an exceptional performance in the year to 28 February 2023, with revenues of £13.5m and pre-tax profit of £4.4m, with gross assets of £4.6m. Performance in the current year is expected to be closer to the 2022 financial year, where the business reported revenues of £8.4m and pre-tax profit of £2.2m.\n \nThe acquisition is expected to be immediately accretive to underlying earnings and underlying operating margin. Following completion of the acquisition, the Group's proforma gearing1 as at 31 March 2023 increases from 0.7 to 1.0x. This remains well below the long-term target range of between 1.5 and 2.0x, leaving capacity for further acquisitions. The pipeline of acquisition opportunities in development remains strong.\n \n \nNick Jefferies, Group Chief Executive of discoverIE plc, said:\n \n\"The acquisition of Silvertel continues our strategy of building a differentiated, international, growth focused electronics group with strong operating margins. The transaction brings another high quality business with strong alignment to our target market...