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PRES.GB Pressure Technologies Plc

39.50
-1.00 (-2.47%)
28 Mar 2024 - Closed
Realtime Data
Share Name Share Symbol Market Type Share ISIN Share Description
Pressure Technologies Plc AQSE:PRES.GB Aquis Stock Exchange Ordinary Share GB00B1XFKR57
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.00 -2.47% 39.50 37.00 42.00 40.50 39.50 40.50 0.00 10:16:18
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Pressure Technologies PLC Acquisition of Martract Limited (2575R)

08/12/2016 7:00am

UK Regulatory


Pressure Technologies (AQSE:PRES.GB)
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TIDMPRES

RNS Number : 2575R

Pressure Technologies PLC

08 December 2016

8 December 2016

Pressure Technologies plc

("Pressure Technologies", the "Company" or the "Group")

Acquisition of Martract Limited

("Martract" or the "Acquisition")

Pressure Technologies is pleased to announce that it has on 7 December 2016 acquired the entire issued share capital of UK based Martract Limited, a profitable, cash generative engineering business that specialises primarily in the grinding and lapping of ball and seat assemblies and gate valves. Martract is a highly specialist, niche business and the market leader in its field through its unrivalled intellectual property and strong longstanding customer relationships. The business is well known to the Group and has been a key supplier into the Precision Engineering Division ("PMC") for over 15 years. The Acquisition is a strong strategic fit with the PMC Division, it will join the other businesses in this division; Roota Engineering, Al-Met and Quadscot. Martract will help to vertically integrate the supply chain and further strengthen our ability to supply bespoke, complex solutions to industries demanding more innovative solutions to increasingly challenging problems.

Highlights

-- Martract's vertical integration with Roota is expected to reduce lead-times and minimise supply chain risk

-- The Acquisition will enable the expansion of relationships with existing PMC customers and reduce competition

   --     Approximately 60% of Martract's revenue is generated outside of the oil and gas market 

-- Martract is a cash generative and profitable business with good near term order book visibility

-- The Board is confident of realising further potential for the business through the expansion into international markets, as the current sales focus is primarily the UK

   --     The Board expects that the Acquisition will be immediately earnings enhancing 

Terms of the Acquisition

The maximum total consideration for the Acquisition is GBP4.3 million on a cash free, debt free basis, comprising an initial cash consideration of GBP3.7 million plus cash balances ("Initial Consideration") and a conditional deferred payment of up to GBP0.6 million ("Additional Consideration"). The Additional consideration payable in respect of the 12 month period following the Acquisition (the "Earn-out Period") is dependent on the future EBITDA performance of Martract. The Initial Consideration will be met from the Group's existing bank facilities and cash.

Key directors of the business will remain as consultants during the Earn-out Period.

Information on Martract and background to and reasons for the Acquisition

Established in 1978, Martract is a profitable, cash generative business that benefits from good near term order book visibility and strong customer loyalty. The Board expects that the Acquisition will be immediately earnings enhancing. For the year ended 31 August 2016 Martract had unaudited revenues of GBP1.2 million and adjusted proforma EBITDA of GBP0.45 million.

Martract has significant technical capability and intellectual property. It employs IP that achieves tight tolerances of sphericalness in the case of ball valves and flatness in the case of gate valves. This guarantees sealing of valves at very high pressures and Martract's IP has been proven to extend the operational life of products many times over; in this area the Board believes it has very few, if any, competitors. All existing operational management and employees will be retained in the business. The work that Martract currently undertakes for its customers is highly complementary to the PMC Division and will further embed our niche capability for valve components in demanding applications as well as extending the division's market reach.

Martract's revenue in 2016 was derived 40% from the oil and gas market and 60% from other diverse sectors. The Board believes that Martract has further potential that can be realised as part of the Group.

The Acquisition of Martract is a strategic move, which the Board believes has three main benefits.

Firstly, within PMC's oil and gas customers there will be an opportunity to expand existing relationships as well as develop new ones; as Martract will be vertically integrated within Roota offering a manufactured and ground product solution the quality of which is unmatched by any known competitor. In addition, the acquisition will shorten the supply chain, substantially increasing the division's competitive advantage as well as reducing product lead-times.

Secondly, Martract has traditionally focused on the UK market and the Board sees considerable potential to further develop international markets as part of the Group.

Thirdly, Martract's business is not wholly reliant on the oil and gas market and currently has customers across a number of other sectors including nuclear and wide-reaching industrial sectors. It is anticipated that the division's businesses will be able to capitalise on Martract's position in these markets.

John Hayward, CEO of Pressure Technologies, said:

"This is an exciting acquisition for the Group, which strengthens our existing market position and gives significant opportunity to penetrate new markets. Martract's reputation for technical ability and quality sits well with our Group capabilities and we are delighted to welcome its dedicated and highly-skilled workforce to the Group."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, please contact:

 
      Pressure Technologies plc                    Tel: 0114 257 3622 
       John Hayward, Chief Executive               www.pressuretechnologies.com 
       Jo Allen, Group Finance Director 
       Keeley Clarke, Investor Relations 
      Cantor Fitzgerald Europe (Nominated          Tel: 020 7894 8337 
      Adviser and Broker) 
      Philip Davies / Will Goode 
      Tavistock                                    Tel: 020 7920 3150 
       Simon Hudson 
 
 
 

COMPANY DESCRIPTION

Company description - www.pressuretechnologies.com

With its head office in Sheffield, Pressure Technologies was founded on its leading market position as a designer and manufacturer of high-pressure systems serving the global energy, defence and industrial gases markets. Today it continues to serve those markets from a broader engineering base with specialist precision engineering businesses and has a worldwide presence in Alternative Energy as a global leader in biogas upgrading. On this foundation, the company is building a highly profitable group of companies through a combination of organic initiatives and acquisitions.

Pressure Technologies has four divisions, Precision Machined Components, Engineered Products, Cylinders and Alternative Energy, serving four markets: oil and gas, defence, industrial gases and alternative energy.

Precision Machined Components

   --      Al-Met, Mid Glamorgan, acquired in 2010 www.almet.co.uk 
   --      Roota Engineering, Rotherham, acquired in March 2014 www.roota.co.uk 
   --      Quadscot, Glasgow, acquired in October 2014 www.quadscot.co.uk 
   --      Martract Limited, acquired in December 2016 www.martract.co.uk 

Engineered Products

   --      Hydratron, Manchester and Houston, acquired in 2010 www.hydratron.com 

Cylinders

-- Chesterfield Special Cylinders, Sheffield, IPO cornerstone in 2007 www.chesterfieldcylinders.com

-- Kelley GTM Manufacturing, Amarillo - 40% stake acquired by the Group in December 2013 www.kelleygtm.com

Alternative Energy

-- Chesterfield BioGas, Sheffield, founded in 2008. Renamed Greenlane Biogas UK on 5 June 2015.

-- Greenlane, Vancouver, Canada and Auckland, New Zealand, acquired in October 2014 www.greenlanebiogas.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACQUBURRNUAURUA

(END) Dow Jones Newswires

December 08, 2016 02:00 ET (07:00 GMT)

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