Volex PLC (AIM:VLX), the manufacturer of power and data transmission products, said it has agreed to buy Murat Ticaret Kablo Sanayi, a deal which will be partly funded via an equity raise.
The AIM-listed firm will pay roughly €178.1mln for the Turkish-based manufacturer of wire harnesses, it said in a statement, on a cash-free, debt-free basis.
Volex said the acquisition is in line with its strategy of organic growth, supplemented by “value enhancing” mergers and acquisitions.
An initial €136.5mln will be paid in cash, while up to €41.6mln will be deferred over two years and dependent on the achievement of certain performance conditions.
"We believe this transaction is truly transformational for Volex, further diversifying our end market and customer exposure by adding a new, fifth growth end market, broadening our product and knowledge offering, whilst structurally improving the profitability of the group,” said Volex executive chairman Nat Rothschild.
The €136.5mln will be satisfied with cash proceeds from a placing and retail offer which plans to raise €68.4mln (£58.5mln).
Volex said it will sell 21,818,181 new ordinary shares through a placing and retail offer at 275p per share.
The new ordinary shares represent roughly 13.7% of the company’s existing issued shares and represent a 3.8% discount to its closing share price on 21 June.
The fundraiser is not conditional on the completion of the acquisition, which is expected to be completed within three months.
If the deal falls through, the board intends to use the cash raised for general corporate purposes.
On Thursday morning, Volex shares were down 2.8% at 278p.