Midwich Group Plc (LON:MIDW), a specialist audio-visual products distributor, has acquired US-based distributor Starin Marketing for US$46.1mln (£35.7mln).
The company is paying US$27.1mln in cash for Starin and taking on the acquired company’s debt of US$19mln.
At the same time, the company has announced it intends to raise £39.7mln through the issue of shares at 500p each, to pay down its debt and provide additional firepower for future acquisitions.
Midwich said the acquisition is expected to give a modest boost to earnings per share in the current financial year.
Starin racked up revenue of US$222.7mln in 2019 and underlying earnings (EBITDA) of US$6.1mln.
"The acquisition of Starin Marketing, Inc. is a significant day in Midwich Group's history, marking our entry into North America, the largest AV [audio-visual] market in the world. Starin's exposure to, and relationships in, the growing unified communications segment will be greatly beneficial to Midwich as it seeks to increase revenues in this fast growing AV sub sector across its global network. The highly experienced management team has built a great business and I look forward to welcoming them and the wider team into the Midwich Group,” said Stephen Fenby, the managing director of Midwich.
“Outside of the acquisition, 2019 was another year of good growth for Midwich, despite negative sentiment in the global economy. The group delivered a robust organic performance from existing businesses and significant contributions from the acquisitions made throughout 2018 and 2019. We have been pleased with the integration of the four businesses acquired during 2019 which have enhanced both our geographic and product coverage and are all trading to plan,” he added.