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Networking firm BATM Advanced Communications (LON:BVC) is to buy Green Lab Hungary Engineering, a developer and distributor of analytical instruments, for US$3.8mln.
The consideration is payable in cash over a three year period, BATM told investors.
Headquartered in Budapest, Green Lab has become one of the leading distributors of analytical instruments for the environmental and industrial sectors. The company has exclusive relationships in Hungary with some of the most prominent operators in the industry.
Green Lab's unaudited revenues for 2015 amounted to US$3.3mln and it generated operating profit of US$0.62mln. It has been profitable for the past five years and the acquisition is expected to enhance BATM's earnings this year..
At the end of 31 December 2015, Green Lab's unaudited gross assets amounted to US$1.9mln.
Green Lab's operations are expected to be synergistic with BATM's Sterilisation Unit operations in Hungary and to provide an extensive network for the group's products.
BATM expects having Green Lab in the fold will increase activity in the group's ECO unit, which focuses on agri-business applications and operates out of Hungary.
The Green Lab distribution network will be complementary to BATM's analytical instruments distribution in Romania and should bolster the group's medical business.
Dr Judit Jeney, the founder and chief executive officer (CEO) of Green Lab, will join the BATM management team.
Dr Zvi Marom, BATM's CEO, said the Green Lab team has a tremendous amount of expertise and the company enjoys an excellent reputation in the industry.
“We believe that Green Lab will contribute both to the distribution business of BATM group in the CIS countries and to our growing business in the ECO environment,” Marom said.
House broker finnCap said: "The deal adds revenues and profits as well as significant expertise and an excellent reputation. "Green Lab will contribute both to BATM’s growing business in the ECO environment and to the distribution network in the Eastern European region." The broker targets 20p a share, compared to a current price of 16.5p - up 2.33% on the day.