discoverIE Group PLC said it has bought Magnasphere, a US-based designer and manufacturer of magnetic sensors and switches for industrial electronic applications for £19.1mln.
The cash deal is on a debt-free basis and will be funded from existing debt facilities.
The acquisition is expected to be completed by the end of the financial year and is forecast to be immediately accretive to underlying earnings and operating margins.
Following the deal, gearing will increase to 1.1x, below the company’s long-term target range of between 1.5 and 2.0x, leaving capacity for further acquisitions.
“The pipeline of acquisition opportunities in development remains strong,” the group said.
Magnasphere, which was founded in 2002, is based in Waukesha, Wisconsin, with manufacturing facilities in Goshen, Indiana.
The business will operate within the group's Variohm cluster of specialist sensor businesses as part of the sensing and connectivity division whilst retaining its distinct brand identity.
Magnasphere's revenues for the year ended 31 December 2021 were $6.8mln with a reported pre-tax profit of $1.9mln and an operating margin of 28%.
Gross assets at 31 December 2021 were $5.9mln and the business has continued to grow well in 2022.
Nick Jefferies, discoverIE's group chief executive, said: “The transaction brings another high quality business into discoverIE, which is accretive to both underlying earnings and margins, and strengthens our US footprint.”