F W Thorpe Acquires Dutch Company Lightronics
The Board of F W Thorpe Plc is pleased to announce the acquisition of 65% of the issued share capital of Dutch company, Lightronics Participaties B.V. (“Lightronics”), a specialist in lighting systems and controls for a range of different sectors.
The acquisition is expected to enhance earnings per share in the first full year of ownership and will complement the Company’s existing technologies, presenting potential growth opportunities and synergies.
F W Thorpe will pay an initial consideration of €7.8m (circa £5.7m), with a fixed commitment that the remaining 35% of the issued share capital will be purchased from existing management between the third and sixth year anniversaries of the acquisition. As part of the transaction, the 35% held by management has been partially funded by F W Thorpe by the issue of a loan. The consideration for the remaining share capital will be based on the same earnings multiple as used to value the initial investment. The initial consideration will be funded via the Company’s existing cash reserves and this is also the intention for the remaining consideration.
The current senior management team have agreed to remain with Lightronics and have signed new contracts to this effect.
Lightronics specialises in the development, manufacture and supply of external and impact proof lighting, which includes street lighting, outdoor wall and ceiling luminaires as well as control systems. The majority of the revenues are derived from the Netherlands but there is an export presence in Germany, France, Belgium, Austria and Norway. Lightronics was originally established in 1946, is based in Waalwijk in the Netherlands and currently employs 45 people. During its last financial year ended 31st December 2014, Lightronics achieved revenues of €13.9m and adjusted profit before tax of €1.4m. Net assets as at 31st December 2014 were €3.1m.
It is expected that Lightronics will make a minor contribution to the group’s profits in 2014/15 and we expect the acquisition to be earnings enhancing in the 2015/16 financial year, being the first full year of ownership.
The addition of Lightronics will further develop F W Thorpe’s sales presence in Europe. This will enable the group to build on the existing success of Lightronics by introducing F W Thorpe’s product portfolio to new territories and further developing existing areas in mainland Europe where F W Thorpe already derives revenues.
Chairman, Andrew Thorpe commented “I would like to welcome Lightronics to the F W Thorpe group. This acquisition enables F W Thorpe to widen its distribution of products and technology in Europe as well as build upon what has been a consistently successful business in its own right for a number of years. We are excited by this opportunity and are confident that this acquisition will generate further value for our shareholders.”