Business
Disposal
Disposal.
About this update from Flowtech Fluidpower Plc
[{"type":"text","content":"\n Flomerics Group PLC\n20 December 2007\n\n\nEmbargoed until 7am 20 December 2007\n\n\n Flomerics Group PLC\n\n Divestment\n\n\nFlomerics Group PLC (\"Flomerics\" or \"the Company\"), the global supplier of\nsimulation software to the engineering and electronics industries, is pleased to\nannounce that it is divesting its electromagnetics line of business (\"the EM\nBusiness\"), in order to increase its focus on areas where the Company has much\nbetter opportunities for growth. The EM Business is being sold to Computer\nSimulation Technology GmbH (\"CST\") with effect from 1 January 2008 for a cash\nconsideration of £1.6 million, subject to the financial results of the EM\nBusiness for the year ended 31 December 2007 and other normal terms and\nconditions.\n\n\nSince entering the electromagnetics simulation market in 1999, Flomerics has\nbuilt up the usage of its MicroStripes and FLO/EMC products around the world.\nHowever, the Company still has only a small share of the market and the\ndirectors have concluded that it would be difficult for Flomerics on its own to\nachieve a strong competitive position in this field. The sale of the EM Business\nto CST, a company that specialises in electromagnetics simulation, signals the\nbeginning of a strategic relationship. Customers will be able to benefit from\nusing a combination of world-leading products from the two companies.\n\n\nFollowing the sale of the EM Business, Flomerics will have a greater focus on\nfluid flow simulation. The directors believe this will enable it to maintain a\nstrong competitive position in the area of electronics cooling, where the\nCompany is world leader, and to take better advantage of the EFD products\nacquired through Nika, which are applicable to wider applications of fluid flow\nsimulation. Sales of the EFD product range have been growing strongly and there\nis the opportunity for them to make a significant contribution to the future of\nthe business. The proceeds of the disposal will be used to enhance the Company's\nposition for future growth in our core business areas.\n\n\nIn the six months ended 30 June 2007, the EM Business contributed £0.9 million\nto turnover and approximately £0.1 million to profit before tax (pre allocation\nof overhead). As at 30 June 2007 the Company had an intangible asset of £0.2\nmillion relating to the EM busine...