Acquisition of Ferranti Power & Control business
10 January 2022
TT Electronics plc
Acquisition of Ferranti Power & Control business
TT Electronics plc ("TT" or the "Group"), a global provider of engineered electronics for performance critical applications, has acquired the Power and Control business of Ferranti Technologies Ltd ("Ferranti P&C"), from Elbit System UK Ltd ("ESUK") for £9.0 million in cash, subject to customary post-completion working capital adjustments.
Highlights of the Acquisition
Ferranti P&C, based in Greater Manchester, designs and manufactures mission-critical complex power and control sub-assemblies for blue chip customers in high-reliability and high-performance end markets, primarily aerospace and defence. One of the principal benefits of the acquisition is that it brings highly skilled employees who provide full-service capabilities from design, assembly, manufacturing, and testing including environmental stress screening and inspection through to service.
Ferranti P&C adds further technology capability, IP and scale to TT's Power Solutions business, which is one of our focus areas for structural growth. It has valuable long-term customer relationships and programmes with leading global aerospace, defence and industrial OEMs operating in highly regulated markets with significant barriers to entry through necessary industry accreditations and customer approvals.
The acquisition is expected to be modestly earnings enhancing, to generate mid-teens operating margins and to generate a return on invested capital in excess of the Group's WACC in year 1. We expect to generate cost synergies of circa £0.4 million by year 3.
Current Trading
TT confirms that trading for the full year was in line with the update provided on 23 November 2021.
Commenting on the acquisition, Richard Tyson, Chief Executive Officer said:
"We are pleased to announce the acquisition of Ferranti's Power and Control business which is in line with our strategy for growth at higher margins and moving up the value chain in our target end markets in A&D. This highly attractive platform adds scale and technology capabilities to our Power Solutions business in Europe. We expect to achieve our financial return hurdle rate in the first full year.
I am delighted to welcome Ferranti Power and Control's highly skilled team to TT as we continue to build differentiated capabilities and engineer smarter solutions for our customers."
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For further information please contact: |
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TT Electronics plc |
Tel: +44 (0)1932 825 300 |
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Richard Tyson, Chief Executive Officer Mark Hoad, Chief Financial Officer Kate Moy, Head of Investor Relations |
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MHP |
Tel: +44 (0)20 3128 8100 |
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Tim Rowntree / Rachel Mann |
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Note:
TT will announce its full year results on 9 March 2022.
About TT Electronics
TT Electronics is a global provider of engineered electronics for performance critical applications. The Company works with market-leading customers in the industrial, aerospace and defence, medical, and transportation sectors. TT has three divisions, Sensors and Specialist Components, Power Electronics and Global Manufacturing Solutions.
The product offerings in the Sensors and Specialist Components division include circuit protection, current sensing, signal conditioning, optoelectronics, and sensors for torque, position, pressure, flow and temperature. The Power Electronics division typically designs and manufactures specialist, high reliability electronic components and sub-assemblies supplying into power management, engine controls and connectivity systems. The Global Manufacturing Solutions division provide high mix low volume manufacturing solutions for products in a wide range of end applications ranging from medical devices, to power control modules used in rail transport infrastructure.
Cautionary statement
This announcement contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this announcement. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new inf ormation, future events or otherwise.
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