Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Cable maker Volex to raise £36mln at a premium to fund latest acquisition

Volex is buying cable harnesses maker Silcotec for just shy of £16mln and is raising £26mln at a slight premium to Tuesday’s closing price
cables
Volex has long signalled its intentions to consolidate the highly-fragmented cable market

Cable maker Volex PLC (LON:VLX) is to continue its recent spending spree after it confirmed plans to buy cable harness supplier Silcotec for up to £15.9mln (€18.1mln).

To fund the acquisition, Volex is raising £36mln from investors by selling 48mln new shares at 75p each – a slight premium to Tuesday’s closing price of 74.5p.

Cable consolidation

The AIM-listed group said in a statement that the placing will de-lever the company and provide the financial muscle needed to continue to grow the company.

Silcotec will be the latest acquisition made by Volex, which has long signalled its intent to consolidate the highly fragmented cable assembly industry.

Only a few weeks ago it announced the purchase of US peer MC Electronics in an all-share deal worth up to £2.6mln.

As for Silcotec, the Ireland-based business generated sales of €17.8mln and underlying earnings (EBIT) of €3.1mln in the year ended December 31 – the latest available set of results.

‘An important step’

“This acquisition is an important step in expanding our Cable Assembly activities in Europe,” said chairman Nat Rothschild.

“Silcotec is a well-run business, providing high quality cables, assemblies and box-builds for the medical industry.

Rothschild added: “Following the fund raising, Volex will have a well-capitalised balance sheet to allow for further investment in our business.”

Liberum analyst Rory Smith put his rating and price target under review following the news but said in a note to clients that “whilst risks remain, Volex has been on an improving trajectory” since the broker initiated its coverage back in June 2016.

Volex shares climbed 3.1% to 76.8p on Wednesday morning.

View full VLX profile View Profile

Volex Group Timeline

Related Articles

Hydrogen refuelling
April 05 2018
As the move towards alternative fuels for vehicles gathers pace, news last month of the opening of the first 'under the canopy' hydrogen refuelling station at Beaconsfield Services on the M40 deserved a bit of a fanfare
Wireless monitoring
May 02 2018
The lighting and building control designer said the latest version, Halcyon V2, is characterised by its low cost, retrofit-able wireless monitoring and control platform
Medical Scan
August 03 2018
TexRAD is essentially a very smart piece of software that analyses medical images to reveal features that are not always evident to the human eye

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use