Advanced Power Components acquires Contech Electronics

Advanced Power Components plc has announced that it has acquired the entire issued share capital of Contech Electronics Limited (“Contech”), a leading distributor of data input devices, for a maximum total consideration of approximately £1.0 million in cash.

The consideration comprises approximately £375,000 for the estimated net assets, subject to adjustment for the actual value of the net assets on completion, and £550,000 for goodwill. In addition, a further payment of up to £75,000 will be made, based on the pre-tax profit performance of Contech during the three months following completion. Approximately £500,000 of the fixed consideration will be paid on completion, with the remainder to be paid in three equal quarterly payments over a period of nine months. This acquisition will be earnings enhancing.

Contech operates within a highly specialised sector of the electronics market, supplying products such as specialist keyboards, barcode scanners, card readers and touch screens to a range of markets including industrial, broadcast and medical. As such, the acquisition diversifies APC’s current areas of business. Contech operates a similar business model to APC, utilising a successful 'Design In' approach, following projects from concept through to production, and providing customers and suppliers with an effective support capability.

In Contech’s audited results for the eight months ended 31 March 2008, the seven-strong Hertfordshire based company generated revenue of £1.26 million, with net profit before tax of £154,000.

Mark Robinson, Chief Executive of Advanced Power Components, commented:

“The acquisition of Contech will allow APC to maintain its strategy of focussing on highly specialised product areas whilst facilitating a degree of diversification into new technologies and markets. We expect that APC’s resources will assist in Contech’s development within a number of specialist sectors leading to a further boost to APC’s overall growth.”