Share Name Share Symbol Market Type Share ISIN Share Description
Elektron Technology Plc LSE:EKT London Ordinary Share GB00B0C5RG72 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 53.50p 53.00p 54.00p - - - 0 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 33.7 4.6 2.1 25.5 100

Elektron Technology PLC Acquisition

15/05/2019 7:01am

UK Regulatory (RNS & others)


Elektron Technology (LSE:EKT)
Historical Stock Chart

6 Months : From Apr 2019 to Oct 2019

Click Here for more Elektron Technology Charts.

TIDMEKT

RNS Number : 0335Z

Elektron Technology PLC

15 May 2019

Elektron Technology Plc

(AIM: EKT, "Elektron" or the "Group")

Acquisition

Elektron Technology Plc is pleased to announce that it has acquired Next Control Systems Limited ("Next"), for a cash consideration of GBP10.5m, inclusive of GBP1.7m of cash in Next as at the date of completion. The price represents a multiple of 6.6X 2018 EBITDA and the deal is expected to be immediately earnings accretive for Elektron.

Next is an excellent strategic fit for Checkit, providing technology and software that enables management teams to monitor, control and optimise business processes. Next will be combined with Checkit to create a global leader in the field of real-time operations management.

This is a transformational deal for Checkit, immediately adding scale and one which the Board believes will significantly accelerate the path to profitability at Checkit.

Background on Next

Next, based in Fleet, Hampshire, UK, has been helping management teams to improve productivity and profitability for over 25 years.

Through its Tutela brand (www.tutelamedical.com) Next is a leader in high-end service based temperature monitoring for healthcare and life sciences within the UK. In addition, through its Next and Axon brands (www.nextcontrols.com; www.axon.eco) it provides data related Building Energy Management System ("BEMS") services. Next has a major relationship with a leading UK retailer covering smart building and plant technologies.

Benefits of the Transaction

Checkit's services transform the performance of common low and medium volume operational processes in global industries, moving them from form based systems, spreadsheets and even pen and paper to the Cloud, through a subscription based SaaS model.

The acquisition of Next, which is a compelling strategic fit, will add immediate scale to Checkit, increasing turnover eight-fold and providing significant opportunities for further sales growth and improvements to operational capabilities, including:

Ø Offering opportunities to cross sell Checkit's Work Management product to Next's customer base

Ø Diversifying that customer base and extend the offering across additional sectors alongside the food service sector (which was previously predominant in Checkit)

Ø Enhancing Checkit's existing range of sensors

Ø Improving operational capability

Ø Bringing domain knowledge of the BEMS market

Ø Leveraging Next sales capabilities to improve Checkit organic growth in the UK and overseas

Financial Impact

In the year ending 31 December 2018 Next's audited operating profit was GBP1.2 million on turnover of GBP10.7 million (2017: GBP1.2 million on turnover of GBP9.8 million). Next's 2018 audited accounts state that 57% of income (2017: 54%) was in the form of recurring revenue relating to software services provided. The remaining income related to one-off charges for consultancy and other IoT services and hardware.

The management accounts for the four months to 30 April 2019 show an operating profit of GBP0.5 million year to date on turnover of GBP3.7 million (2018 GBP0.4 million on turnover of GBP3.3 million). It is expected that the acquisition will be immediately earnings accretive for Elektron.

Audited net assets (excluding cash) were GBP1.7 million at 31 December 2018.

The acquisition of Next was funded from the Group's existing cash reserves which as at 31 January 2019 stood at GBP10.1 million. The Group has taken the opportunity to put in a place a GBP3 million bank overdraft facility which combined with its existing invoice discount facilities of up to GBP3m will provide the Group with up to GBP6m of facilities for working capital purposes.

Commenting on the transaction, Keith Daley, Executive Chair of Elektron Technology said

"The acquisition of Next marks another milestone for Checkit. It further significantly enhances our value proposition in capabilities, services and demonstration of scale. We look forward to realising the many opportunities offered by the combination of Checkit and Next."

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) No 596/2014.

For further enquiries:

Elektron Technology plc +44 (0) 1223 371 000

www.elektron-technology.com

Keith Daley (Executive Chairman)

John Wilson (Chief Executive Officer)

Andrew Weatherstone (Chief Financial Officer & Company Secretary)

Yellowstone Advisory (Investor Relations)

Alex Schlich

+44 (0) 7710 164 120

N+1 Singer (Nominated Adviser & Broker)

Shaun Dobson / Jen Boorer (Corporate Finance) +44 (0) 20 7496 3000

Rachel Hayes (Corporate Broking)

Forward looking statements

This document contains forward looking statements with respect to the business, strategy and plans of Elektron Technology plc and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Elektron or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Elektron's actual future results may differ materially from the results expressed or implied in these forward looking statements as a result of a variety of factors among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. The forward looking statements contained in this document are made as of the date hereof, and Elektron undertakes no obligation to update any of its forward looking statements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

ACQAIMPTMBMBBPL

(END) Dow Jones Newswires

May 15, 2019 02:01 ET (06:01 GMT)

1 Year Elektron Technology Chart

1 Year Elektron Technology Chart

1 Month Elektron Technology Chart

1 Month Elektron Technology Chart
Your Recent History
LSE
EKT
Elektron T..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20191018 01:00:19