Acquisition

RNS Number : 8481B

Senior PLC

10 March 2014

 



Aerospace & Energy acquisition with operations in Malaysia & China

Senior plc ("Senior" or the "Group") is pleased to announce that it has entered into an agreement to acquire 100% of the issued share capital of UPECA Technologies Sdn. Bhd. ("UPECA") for an expected aggregate consideration of MYR415m (£75.5m) from Millennium Arena Sdn. Bhd., a holding company for UPECA's private shareholders.

The acquisition is expected to complete towards the end of March following receipt of the customary consents required for such a transaction.

UPECA is a Malaysian-based manufacturer of high-precision engineered components serving the Aerospace & Energy sectors.  The business, originally founded by its current majority shareholder, has over 20 years of manufacturing experience and enjoys strong relationships with 'blue chip' customers across all of its markets.

UPECA has two manufacturing facilities in Malaysia, one selling to the aerospace industry and the other to the energy market, and a third facility in China, which is located in Tianjin and specialises in energy applications.  The two Malaysian facilities are located approximately 30 minutes apart on the outskirts of Kuala Lumpur.  UPECA employs around 625 people across its three operations and the existing management team will continue to manage the business post acquisition.

Approximately one third of UPECA's revenue currently derives from the aerospace market and two thirds from the energy, oil and gas market.  Prospects for healthy future growth for UPECA are clearly evident from the high level of customer interest in the Asia-Pacific region for both these markets.

The total consideration for the acquisition of 100% of UPECA is expected to be MYR415m (£75.5m)⁽¹⁾, of which MYR320m (£58.2m) will be paid in cash at completion and an estimated MYR95m (£17.3m) of net debt will be assumed by Senior.  The acquisition will be funded using the Group's cash and existing borrowing facilities.

For the year ended 31 March 2013, UPECA reported sales of MYR154m (£28.0m) and trading profit before interest, tax and depreciation of MYR35m (£6.3m).  For the year ending 31 March 2014, UPECA expects to report sales of MYR172m (£31.3m) and profit before interest, tax and depreciation of MYR41m (£7.4m).

Gross assets of the business at 31 March 2013 were MYR174m (£31.6m).

The acquisition is expected to be immediately earnings enhancing.

Commenting on the acquisition, Mark Rollins, Senior's Group Chief Executive, said:

"I am very pleased to announce the acquisition of UPECA and to welcome all of its employees to the Senior Group.  UPECA represents an excellent addition to Senior's portfolio, strengthening the Group's aerospace and energy market presence in the increasingly important South East Asian region.  UPECA's 20 years of experience, its impressive capabilities and its own strong customer relationships, combined with Senior's wider market access and financial strength, are expected to create an excellent platform to enhance the future growth prospects for the whole Senior Group."

Note: (1) an exchange rate of £1 : MYR5.5 has been assumed

Further information

Mark Rollins	Group Chief Executive, Senior plc	[phone]
Derek Harding	Group Finance Director, Senior plc	[phone]
Philip Walters	RLM Finsbury Group	[phone]

About Senior

Senior is an international manufacturing group with operations in 13 countries.  It is listed on the main market of the London Stock Exchange (symbol SNR).  Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land vehicle and energy markets.  Further information on Senior plc may be found at: www.seniorplc.com

About UPECA

A privately held company, in operation since 1990, UPECA is backed by over 20 years of experience in offering innovative precision machining, engineering and manufacturing solutions to its global multinational customers.  UPECA delivers value and innovation to its global customers through its Aerospace Division and Energy, Oil & Gas Division.  Further information on UPECA may be found at: www.upeca.com

Cautionary Statement

This announcement contains certain forward-looking statements.  Such statements are made by the Directors in good faith, based on the information available to them at the time of the announcement, and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.

 

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