Acquisition of Aero Stanrew Group Limited
21 December 2015
TT Electronics plc
Acquisition of Aero Stanrew Group Limited
TT Electronics plc ("TT" or the "Group"), a global provider of engineered electronics for performance critical applications, today announces the acquisition of Aero Stanrew Group Limited ("Aero Stanrew") for a consideration on a cash and debt free basis of £42.2m.
Headquartered in Barnstaple, Devon, Aero Stanrew is a leader in the design & production of electromagnetic components and electronic systems for harsh environments and safety critical applications. The business is primarily focused on the commercial aerospace and defence markets with sole-source positions on key growing platforms, providing good visibility of future revenues.
Aero Stanrew solves complex technical challenges in product areas and for a customer base which overlap with a number of our businesses. The combination of the two businesses provides the opportunity to accelerate our strategy by offering a wider range of capability to a broader base of tier 1 customers and increase our exposure to aerospace and defence. The acquisition will be reported as part of the Advanced Components division.
In the year ended 28 February 2015, Aero Stanrew reported revenues of £16.5m and adjusted† EBITDA of £3.2m. For the calendar year ending 31 December 2015, Aero Stanrew is expected to deliver revenues of £18.0m and adjusted† EBITDA of £3.7m. Gross assets of the business were approximately £13.6m as at 28 February 2015. The acquisition is expected to enhance earnings immediately and the return on invested capital to exceed TT's cost of capital in the second full year of ownership.
Aero Stanrew is currently owned by Westbridge Capital, its Directors and a number of small private shareholders. The consideration has been settled through a combination of £39.8m in cash from the Group's existing borrowing facilities and the issue of 2.576m TT shares to key members of the management team. We are very pleased that Clive Scott, the CEO, and the existing management team will remain with the business.
Commenting on the acquisition Richard Tyson, Chief Executive Officer, said today:
"The acquisition of Aero Stanrew accelerates our strategy to return to sustainable, profitable growth. It is a significant step to strengthen our position in growth areas of the aerospace and defence market, enhancing the Group's technology and product portfolio."
Aero Stanrew is an excellent business and has significant further potential as part of TT. There is a strong technology, customer and cultural fit between the two businesses, and we believe that there is mutual benefit in making Aero Stanrew part of the Group.
I am really excited about the prospects of this combination and am delighted to welcome Clive and Aero Stanrew's employees to TT Electronics."
Conference Call Details
A conference call with Richard Tyson and Mark Hoad for analysts and investors will be held at 09.00 GMT today, Monday 21 December 2015.
Conference Dial in: 01452580733
Participant ID: 12356491
A replay facility will be made available shortly after the conclusion of the conference call:
Dial-in number: 01452550000
Participant ID: 12356491
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For further information please contact: |
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TT Electronics plc |
Tel: 01932 825300 |
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Richard Tyson, Chief Executive Officer Mark Hoad, Chief Financial Officer |
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MHP |
Tel: 020 3128 8100 |
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Tim Rowntree / John Olsen / Jamie Ricketts |
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Notes |
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† Adjusted to exclude monitoring fees, non-executive director fees and restructuring costs |
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Cautionary statement
This statement 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.
This information is provided by RNS
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