LPA Group PLC Product Line Acquisition (2281U)

TIDMLPA

RNS Number : 2281U

LPA Group PLC

27 March 2023

LPA GROUP PLC

("LPA", the "Company" or the "Group")

Product Line Acquisition

LPA Group plc, the high reliability LED lighting, electronic and electro-mechanical system designer and manufacturer, is pleased to announce the conditional purchase of a product line from Amphenol Limited ("Amphenol") (the "Acquisition"). The product line is Amphenol's UK historic range of railway inter-carriage electrical connectors (inter-car jumpers), complementing LPA Connection Systems' existing product range.

The Acquisition, effective 24 March 2023, replaces a ten year licensing agreement between LPA and Amphenol, signed in May 2021, whereby LPA undertook the manufacture and supply of Amphenol connectors to the UK rail aftermarket customer base, and the profits from the product line were shared on a 50:50 basis between the two parties.

The Acquisition enables LPA to continue to manufacture and supply the railway inter-carriage electrical connectors direct to the customer, and now retaining all associated profits.

Paul Curtis, CEO, commented: "This is an excellent agreement for all parties, assisting both in their strategies of development and growth for the coming years. The aftercare market is a key focus for LPA and these products provide access to nearly 3,000 existing vehicles, to which we can offer our excellent levels of quality and support over the coming decade. This product line will support the Group's delivery of FY23 results in line with existing Board expectations."

The Acquisition, now agreed and signed, is conditional on formal approval from our customer. The terms of the Acquisition have been discussed with the customer, no problems are envisaged, and formal approval is expected to be obtained within the coming weeks.

The revenue for this product line for the year ended 30 September 2022 was GBP388,000, with a total PBT of GBP115,000 split between the two parties. LPA is acquiring all product line intellectual property and tooling. Consideration paid for the Acquisition is GBP500,000 satisfied in cash from existing cash resources. As at 28 February 2023, LPA had cash of approximately GBP1.6m (unaudited) and bank debt of GBP2.1m (unaudited).

 
 Enquires:                             www.lpa-group.com     Tel: 
------------------------------------  -------------------   -------------- 
 
 LPA Group plc                                               01799 512 800 
 Robert B Horvath                      Chairman 
 Paul Curtis                           CEO 
  Stuart Stanyard                       CFO 
 
 
 finnCap                               NOMAD and Broker      020 7220 0500 
 Ed Frisby / Abigail Kelly 
  (Corporate Finance) 
  Tim Redfern / Charlotte Sutcliffe 
  (ECM) 
 

About LPA

LPA Group plc (AIM: LPA) is a market leading designer, manufacturer and supplier of high reliability LED lighting, electronic and electro-mechanical systems, and a distributor of engineered components.

Focused on transport (rail and aviation), defence, infrastructure and industrial markets and supplying into hostile and challenging environments, LPA is known for engineering solutions to improve product reliability, reducing maintenance and life cycle costs.

The Group has three sites across the UK, selling to customers in the UK and overseas. Two of these are design and manufacturing sites: LPA Connection Systems - electro-mechanical systems for rail, aviation and industrial, and LPA Lighting Systems - LED lighting and electronic systems for rail and infrastructure. The third site is LPA Channel Electric - a value added distributer of engineered components for rail, aerospace and defence.

With over 160 years of UK design and manufacture, and with origins in the first ever light installed in 'Electric Avenue', Brixton; innovation is core to LPA and to the products and services supplied to our customers worldwide.

For more information visit www.lpa-group.com

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Caution regarding forward looking statements

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March 27, 2023 02:00 ET (06:00 GMT)