discoverIE’s latest acquisition is part of a strategy to use margin-accretive deals to get margins up to 13.5% by March 2025 and to 15% in the medium term, says broker Liberum.
Slovakia-based 2J Antennas, bought for a cash consideration of €52.5 million (£45m), brings to the group a designer and manufacturer of high-performance antennas for industrial electronic connectivity applications.
The price is an EV/EBIT multiple of fourteen times compared to 9.5 times for the recent Silvertel acquisition, but 2J has wireless connectivity expertise as well as synergy potential with Antenova, the group’s existing wireless operating company.
Areas such as the Industrial Internet of Things (IIoT), robotics and artificial intelligence (AI) controlled industrial systems will require dependable wireless communication and make this a fast-growing sector, believes the company.
ShoreCap notes 2J’s operating margins last year were 21% on revenue of €18.1m and discoverIE expects the acquisition to be immediately accretive.
'Buy' with a target price of 1010p is Liberum’s view.