Judges Scientific PLC (AIM:JDG) said it has acquired Northamptonshire businesses Geotek Holding and Geotek Coring for a maximum of £80mln, the group's 20th and largest acquisition, expected to boost earnings in the current year.
Shares at the company jumped 10.42% to 7,575.00p.
The AIM-listed company acquires and develops scientific instrument companies, and has acquired 20 businesses since 2005.
Geotek is a developer and manufacturer of instruments used to measure and log various characteristics of geological cores and a supplier of related services.
The deal consists of an initial cash consideration of £45mln and further contingent consideration (an earn-out) of up to £35mln to be satisfied through a mixture of cash and new ordinary shares in the company.
The earn-out starts to become payable on achievement of a minimum adjusted EBIT of £6.4mln for calendar year 2022 increasing pro rata on a 7:1 ratio until it reaches a cap when an adjusted EBIT of £11.4mln is achieved, Judges Scientific said in a statement.
A new £100mln club facility led by Lloyds Banking Group PLC (LSE:LLOY), Bank of Ireland (LSE:BKIR) and and Santander UK plc is to finance the acquisition.
Geotek's combined accounts for the financial year ending April 30, 2021 show revenue of £7.3mln, pre-tax profits of £1.5mln, with £19.5mln in net assets, including £11.6mln in cash.
"Geotek is a world leading business in a focused global niche, providing top-quality products and services which are essential for the improvement of geophysical knowledge. This cash generative and earnings enhancing acquisition fits within Judges' disciplined acquisition strategy," said chair Alex Hambro.
Geotek's founders Peter Schultheiss and Quentin Huggett will both enter into one-year service contracts, while managing director Anthony Bosley is to remain in the same role.