TIDMVLX
RNS Number : 8157J
Volex PLC
26 August 2021
26 August 2021
Volex plc
("Volex" or the "Company")
Acquisition of Irvine Electronics, Inc. for $16.4 million
Expands geographic coverage and technical capability in key
North American market
Volex plc (AIM:VLX), the global supplier of integrated
manufacturing services and power products, is pleased to announce
that it has signed a share purchase agreement for the acquisition
of the entire issued share capital of Irvine Electronics, Inc.
("Irvine"), for a total consideration of $16.4 million (the
"Acquisition"). The Acquisition will be satisfied in cash at
completion from the Company's existing debt facilities and will be
earnings enhancing from completion. The Acquisition is expected to
complete in Q3 FY2022, subject to customary closing conditions
including regulatory approvals in the US.
Strategic Rationale
-- Irvine is a US-based manufacturer of electronic solutions,
including printed circuit board assemblies, with over 30 years of
experience and deep relationships across a wide variety of
blue-chip customers, particularly in the defence, military
aerospace and medical markets
-- The Acquisition will strengthen Volex's existing profile in
North America, adding further capabilities and capacity in
California to complement the Group's existing operations in
Washington state and Mexico, creating a compelling value
proposition for customers in the region
-- Expanding on our integrated manufacturing services strategy,
the Acquisition will further strengthen Volex's ability to provide
customers with vertically integrated solutions through enhanced
printed circuit board assembly capabilities
Transaction Highlights
-- Earnings-enhancing from completion
-- Consideration represents 3.5x adjusted(1) EBITDA for the year ended 31 December 2020
-- Irvine delivering current annual run rate adjusted(1) EBITDA c.$3-4m
-- Implementing the Volex continuous improvement methodology and
deploying incremental investment in capabilities and infrastructure
will be value enhancing
-- Grow Volex's capabilities and profile in the significant and
attractive US defence market, providing opportunities to support
long-term customer programmes
-- On completion of the transaction, the Company will still have
financial flexibility to continue to progress opportunities in its
exciting acquisition pipeline
Commenting on the Acquisition, Nat Rothschild, Executive
Chairman of Volex said:
"The acquisition of Irvine increases our geographic coverage and
technical capabilities in the key North American market. Our
strategic intent is to develop Volex's presence in the defence and
military aerospace markets, adding further blue-chip customers
involved in long-term programmes and partnerships.
With advanced manufacturing located in Southern California, in
the centre of one of the most dynamic electronics manufacturing
environments in North America, Irvine will enhance our footprint,
further complementing our total integrated manufacturing solutions
strategy and strengthening our global capabilities in new and
existing markets.
This acquisition is indicative of our ongoing M&A strategy
which, along with our pursuit of operational excellence and organic
growth, will assist Volex as we target $650 million in revenues and
$65 million of underlying operating profit by 2024."
About Irvine
Irvine, a US based manufacturer of electronic solutions, was
founded in 1990. The company has a very stable customer base which
it supports on long-term projects. Most of these customers are in
the defence sector with other significant customers in aerospace,
medical and complex industrial technology sectors. It has a 50,000
square foot manufacturing site which provides ample capacity to
grow and is accredited to stringent international quality
standards. In the year ended 31 December 2020, Irvine generated
revenues of $26.6 million, EBITDA of $8.4 million and profit before
tax of $9.6 million. The net assets of Irvine as at 31 December
2020 were $4.3 million. The results of the year ended 31 December
2020 include a significant non-recurring customer project for
Covid-19 related medical equipment which has now been substantially
completed. Excluding the impact of this one-off project and other
non-recurring Covid-related adjustments, the adjusted(1) EBITDA and
adjusted(1) profit before tax for the year ended 31 December 2020
are $4.7 million and $4.6 million respectively.
1. Adjusted performance measures exclude certain projects,
government support and one-off items that arose as a result of the
Covid-19 pandemic and are not expected to be a feature of the
performance of the business in future financial periods
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of Volex plc is Christian Bedford, Group General Counsel
& Company Secretary.
For further information please contact:
+44 (0)7971 156
Volex plc 431
Nat Rothschild, Executive Chairman
Jon Boaden, Chief Financial Officer
Christian Bedford, Group General Counsel and
Company Secretary
Singer Capital Markets - Nominated Adviser +44 (0)20 7496
& Joint Broker 3000
Shaun Dobson
George Tzimas
+44 (0)20 7991
HSBC Bank plc - Joint Broker 8888
Simon Alexander
Joe Weaving
+44 (0)20 7250
Powerscourt - Media Enquiries 1446
James White
Ollie Head
About Volex
Volex plc (AIM:VLX) is a global leader in integrated manufacturing
for performance-critical applications and a supplier of
power products. We serve a diverse range of markets and
customers, with particular expertise in cable assemblies,
higher-level assemblies, data centre power and connectivity,
electric vehicles and consumer electricals. We are headquartered
in the UK and operate from 17 manufacturing locations with
a global workforce of over 6,300 employees across 21 countries.
Our products are sold through our own locally based sales
teams and through authorised distributor partners to Original
Equipment Manufacturers ('OEMs') and Electronic Manufacturing
Services ('EMS') companies worldwide.
All of the products and services that we offer are integral
to the increasingly complex digital world in which we live,
providing power and connectivity from the most common household
items to the most complex medical equipment. For more information,
please visit www.volex.com
ENDS
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END
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August 26, 2021 02:00 ET (06:00 GMT)
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