Flowtech Fluidpower PLC FLOWTECH EXPANDS ITS FOOTPRINT IN EUROPE (1529Q)

TIDMFLO

RNS Number : 1529Q

Flowtech Fluidpower PLC

07 September 2017

 
                                                    NEWS RELEASE 
                     Issued on behalf of Flowtech Fluidpower PLC 
                                               Immediate Release 
 
                      FLOWTECH FLUIDPOWER PLC 
              ("Flowtech," the "Group" or "Company") 
 
       Flowtech expands its footprint in Europe through the 
          Acquisition of The Hydraulic Group B.V. Benelux 
 London: Thursday, 7 September 2017: AiM listed specialist 
  technical fluid power products supplier Flowtech Fluidpower 
  plc (LSE: AiM: symbol: FLO) is pleased to announce 
  the further strengthening of its Power Motion Control 
  (PMC) division through the acquisition of The Hydraulic 
  Group B.V., including its main trading operation, 
  Hydroflex Hydraulics ("Hydroflex"), a distributor 
  of hydraulic equipment and components, predominantly 
  to the mechanical engineering, marine and agricultural 
  sectors. The business is headquartered in Rotterdam, 
  and has a sales presence in Brussels; it also complements 
  the Group's existing Flowtechnology operation in the 
  Netherlands. 
 
  Hydroflex was founded 50 years ago and holds several 
  long-term customer relationships through its operations 
  in the Netherlands and Belgium. The business employs 
  42 people in total. The acquisition provides another 
  complementary business to the Group's PMC division, 
  delivering incremental revenue through a wider geographical 
  channel and extends Flowtech's position with important 
  European suppliers, and in particular, Eaton Corporation. 
 
  Hydroflex will operate as an independent sister company 
  within the PMC division and will continue to be managed 
  by the previous owner and Managing Director, Leo Voogd, 
  who has been with the business for over 20 years. 
  For the year ended 31 December 2016, Hydroflex achieved 
  sales of GBP6.7 million producing EBIT of GBP0.4 million. 
  Net assets excluding net debt at the same date were 
  GBP1.1 million. The Group expects to deliver synergy 
  opportunities over the short and medium term through 
  coordinated procurement and back office activities, 
  as well as wider commercial opportunities through 
  collaboration with the Flowtechnology Benelux operation, 
  and the PMC division in general. The new business 
  will also act as a "springboard" for further complementary 
  acquisition activity in the Benelux region. 
  The consideration of approximately GBP2.8 million 
  is to be satisfied as to c.GBP2.1 million in cash 
  on completion, and the balance of c.GBP0.7 million 
  by the allotment of 495,179 new ordinary shares in 
  Flowtech (the "Consideration Shares"). to Leo Voogd. 
  In addition, an option over 330,119 shares is to be 
  issued with an exercise price of 138.7 pence. The 
  Group will also assume the net debt position of Hydroflex 
  at completion, which is expected to be cGBP0.6m. The 
  maximum total consideration, including assumed debt, 
  following any completion accounting adjustments is 
  c.GBP3.7 million. 
  The Consideration Shares have been credited as fully 
  paid and will rank pari passu in all respects with 
  the existing ordinary shares in the capital of the 
  Company in issue, including the right to receive all 
  dividends and other distributions declared, made or 
  paid in respect of such shares after the date of issue 
  of the shares. Application has been made for the Consideration 
  Shares to be admitted to trading on AIM and it is 
  expected that admission will become effective and 
  that dealings will occur on or around 13 September 
  2017 ("Admission"). 
  On Admission, the Company's issued share capital will 
  consist of 52,157,195 ordinary shares. There are no 
  ordinary shares held in treasury. Therefore, in accordance 
  with the FCA's Disclosure and Transparency Rule 5.6.1, 
  the Company confirms that following Admission, the 
  total number of voting rights (TVR) in the Company 
  will be 52,157,195. 
  Sean Fennon, Chief Executive, Flowtech Fluidpower 
  plc commented: 
  "As a Board, we are delighted to add this successful 
  business to the Group's portfolio. We have, as stakeholders 
  know, wished to enhance our European presence and 
  this opportunity represents the first move internationally 
  for our PMC business. Having got to know that Hydroflex's 
  culture, model and aspirations near mirrors that of 
  our own, the new skills, customers and end markets 
  introduced will further strengthen Flowtech's profile, 
  product offering and technical expertise; this will 
  serve us well as we continue to roll-out our strategy 
  of building the leading fluid power group" 
 
  Leo Voogd, Managing Director of The Hydraulic Group 
  B.V. added: 
  "The opportunity to be involved with the exciting 
  developments of the Flowtech strategy in our region 
  was hugely influential in my decision to sell the 
  business. There are great synergies and this move 
  considerably enhances several aspects of our Benelux 
  business and offers new and exciting prospects for 
  all our employees. My team and I are looking forward 
  to working as part of this industry respected business 
  - we recognise that the strategy and the resources 
  now open to us make it possible to achieve significant 
  growth beyond what was achievable as an independent 
  business." 
 
  In summary, the Board of Flowtech remain very encouraged 
  about the future. The Group will be releasing its 
  Half Year results for the period ended June 2017 on, 
  Tuesday 12 September. 
 

Note:

The majority of the consideration to be paid in Euros. The above values have been converted at an exchange rate of 1.09 EUR/GBP

 
 Enquiries: 
  Flowtech Fluidpower plc 
  Sean Fennon, Chief Executive 
  Bryce Brooks, Chief Financial Officer 
  Tel: [phone] 
  Email: [e-mail] 
 Zeus Capital Limited (Nominated Adviser and Broker) 
  Andrew Jones, Alistair Donnelly (corporate finance) 
  Dominic King, John Goold (sales & broking) 
  Tel: [phone] 
 
  finnCap Limited (Joint Broker) 
  Ed Frisby, Kate Bannatyne (corporate finance) 
  Rhys Williams, Emily Morris (sales & broking) 
  Tel: [phone] 
 
  TooleyStreet Communications (IR and media relations) 
  Fiona Tooley 
  Tel: [phone] or email: [e-mail] 
 
 
 EDITORS NOTES 
------------------------------------------------------------------------------------- 
 
   About Hydroflex Group: 
   Hydroflex is a supplier and stockholder of hydraulic 
   components covering industrial hydraulic steering components, 
   high pressure hoses, hose assemblies and related products. 
   Supplying worldwide, the business is recognised for 
   providing total solutions to its global customers exploiting 
   its technical skills within its central warehouse based 
   in Oud-Beijerland, where the stockholding covers some 
   30,000 items, through to its offices in Rotterdam and 
   Brussels. Orders can be placed by telephone, e-mail 
   24/7 using a bespoke scan2order system. Specific core 
   markets include shipbuilding, general engineering, 
   oil and gas, offshore and petrochemicals and it has 
   some presence within both the OEM and MRO markets. 
 
   For more information please visit www.hydroflex.nl 
 About Flowtech Fluidpower plc 
  Founded as Flowtech in 1983, the Flowtech Group is 
  the UK's leading specialist supplier of technical fluid 
  power products. The business joined AiM in 2014. Today, 
  the business has three distinct divisions: 
 Division:        What we do:                       Locations: 
---------------  --------------------------------  ---------------------------------- 
 Flowtechnology   focus on supplying distributors   Flowtechnology Benelux 
                   and resellers of industrial       (Deventer) 
                   MRO products, primarily           Flowtechnology China 
                   serving urgent orders             (Guangzhou) 
                   rather than bulk offerings.       Flowtechnology UK (Skelmersdale) 
                   It offers an unrivalled           Indequip (Skelmersdale) 
                   range of OEM and Exclusive 
                   Brand products to over 
                   3,400 distributors and 
                   resellers. The catalogue 
                   is recognised as the 
                   definitive source for 
                   fluid power products, 
                   containing 100,000 individual 
                   product lines and are 
                   distributed to more 
                   than 80,000 industrial 
                   MRO end users. 
---------------  --------------------------------  ---------------------------------- 
 Power Motion     Specialise in the design,         Primary Fluid Power 
  Control          assembly and supply               (Knowsley) 
  (PMC)            of engineering components         Nelson Fluid Power- 
                   and hydraulic systems             (Dublin, Lisburn, Dungannon) 
                   and is further enhanced           TSL Fluidpower (West 
                   by a service and repair           Yorkshire) 
                   function,                         Albroco (Knowsley) 
                                                     Hydraulics & Transmissions 
                                                     (Ludlow) 
                                                     HiPower Hydraulics (Cork, 
                                                     Dublin, Belfast Manchester) 
                                                     Hydroflex Hydraulics 
                                                     (Brussels, Rotterdam 
                                                     and OudBeijerland) 
---------------  --------------------------------  ---------------------------------- 
 Process          focus on the supply               Hydravalve, (Willenhall) 
                   of industrial components          Orange County (Spennymoor) 

                   and solutions to the 
                   process sectors. 
---------------  --------------------------------  ---------------------------------- 
 All three of the Group's divisions have overlapping 
  product sets, allowing procurement synergies to be 
  maximised 
 The divisions are supported by a centralised back office 
  team at the Skelmersdale site and a procurement and 
  quality control team in Shanghai. In total, the business 
  employs over 400 people. For more information please 
  visit, www.flowtechfluidpower.com 
 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under

the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service,

this inside information is now considered to be in the public domain.

This information is provided by RNS

The company news service from the London Stock Exchange

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September 07, 2017 10:38 ET (14:38 GMT)