Volex to buy cable harness manufacturer Silotec in EUR 18m deal
Cable assemblies supplier Volex announced the proposed acquisition of the business and assets of Silcotec Europe, a manufacturer and seller of cable harnesses, for a total consideration of up to €18.1m on Wednesday.
The AIM-traded company also announced a conditional placing to raise £36.0m before expenses through the issue of 48 million new ordinary shares at a price of 75p each, in order to finance the acquisition as well as provide additional capital for the enlarged group.
It said the placing was oversubscribed, with demand from new and existing institutional shareholders.
Volex’s board described Silcotec as a manufacturer and seller of cable harnesses and electronic sub-assemblies for the medical, telecommunications and computer industries, with 160 employees in its production facility in Slovakia and customer service and finance personnel based in Ireland.
For the year ended 31 December 2016, Silcotec generated revenue of €17.8m and EBIT of €3.1m.
The consideration of up to €18.1m comprised initial cash consideration of €13.1m, which would be payable to the seller on completion of the acquisition, as well as €3m to be satisfied by the issue of 3,521,437 new ordinary shares in Volex on completion and subject to a one-year lock up, and deferred cash consideration of up to €2m payable to the seller 12 months from completion, subject to certain conditions.
“This acquisition is an important step in expanding our cable assembly activities in Europe,” said Volex executive chairman Nat Rothschild.
“Silcotec is a well run business, providing high quality cables, assemblies and box-builds for the medical industry.
“In addition, following the fund raising, Volex will have a well capitalised balance sheet to allow for further investment in our business which will benefit our customers, employees and shareholders.”