DiscoverIE Group PLC (LON:DSCV), the customised electronic components specialist, said it has bought Limitor, a German designer and manufacturer of thermal safety components and sensors.
DiscoverIE is initially paying €14.5mln to acquire Limitor on debt-free, cash-free basis, which will be funded from the group’s existing debt facilities.
A contingent payment of €3.5mln may be triggered depending on the performance of the acquired business over the next three years.
The acquisition, which is expected to enhance the group’s underlying earnings and beef up its underlying operating margin, is subject to regulatory approvals, which are expected to be received in the first quarter of next year.
Limitor has performed consistently well over recent years, discoverIE said, with revenues for 2019 of €8.2mln generating a reported pre-tax profit of €1.7mln, and an operating margin of 21%. Gross assets at the end of 2019 stood at €3.9mln.
Trading over the last twelve months has also been resilient, the UK company added.
"The acquisition of Limitor continues our strategy of building a differentiated, international, growth-focused electronics group with strong operating margins and will be accretive. Limitor has a long-established track record of manufacturing and supplying high-quality custom sensors internationally, principally for safety applications,” said Nick Jefferies, the chief executive of discoverIE in a statement.
“Operating within our Variohm cluster of sensor businesses, it will gain access to our wider base of customers and with it, new sales opportunities in our target markets. We are delighted to welcome the Limitor team into discoverIE Group,” he added.