Carclo plc Acquisition of FLTC (Europe) a.s. (9513A)
March 30 2017 - 1:01AM
UK Regulatory
TIDMCAR
RNS Number : 9513A
Carclo plc
30 March 2017
30 March 2017
Carclo PLC
("Carclo", the "Company" or the "Group")
Acquisition of FLTC (Europe) a.s.
Carclo announces that its UK subsidiary, Carclo Overseas
Holdings LTD. ("COHL"), has acquired FLTC (Europe) a.s. ("FLTC")
for an initial consideration of CZK 27.0 million (approximately
GBP0.9 million) in cash (the "Completion Consideration") plus
further deferred consideration of up to CZK16.2 million
(approximately GBP0.5 million) in cash (the "Deferred
Consideration"), which is subject to the satisfaction of certain
performance criteria (the "Acquisition"). The Completion
Consideration is subject to a cash and working capital adjustment
of up to CZK 45.4 million (approximately GBP1.45 million) (the
"Cash and Working Capital Adjustment"). An initial Cash and Working
Capital Adjustment payment of CZK 41.3 million (approximately
GBP1.32 million) was made upon completion of the Acquisition
("Completion"), of which CZK 29.5 million (approximately GBP0.94
million) represented cash held by FLTC at the time of Completion. A
final Cash and Working Capital Adjustment payment will be made
subsequent to Completion.
FLTC is an independent automotive design company based in
Ostrava, Czech Republic and employs 35 designers, electronics and
CAD engineers solely focussed on automotive LED lighting design.
FLTC has been a major supplier to Carclo's subsidiary, Wipac
Limited ("Wipac"), for the last three years and Wipac accounted for
approximately one third of FLTC's sales in the year ended December
2016. FLTC is known and respected by several of Wipac's key
customers both through their direct relationships as well as
through their work for the Group. FLTC will be integrated into
Wipac's business and will transition its activities away from third
party contracts and instead work exclusively to deliver Wipac
customers' projects.
The Deferred Consideration of up to CZK 16.2 million
(approximately GBP0.5 million) is due for payment in two
instalments on the second and fourth anniversaries of the
Completion date (30 March 2017) subject to seven former
shareholders continuing to be employed by the Company. For the year
ended 31 December 2016, FLTC reported unaudited turnover of CZK49.2
million (approximately GBP1.58 million), unaudited profit before
tax of CZK 11.5 million (approximately GBP0.38 million), unaudited
net assets of CZK 46.7 million (approximately GBP1.50 million) and
unaudited gross assets of CZK 51.1 million (approximately GBP1.64
million).
The Board expects the acquisition of FLTC to result in a modest
improvement in Group profitability in the first full year following
Completion given FLTC's lower cost base compared to Wipac's
equivalent design resources in the UK.
Moreover the Board believes the Acquisition will act as a
further catalyst in its stated strategy of rapidly expanding its
Wipac LED lighting operations into both the low volume and mid
volume prestige car markets.
The Completion Consideration has been fully funded utilising the
Group's short-term debt facilities.
The Board confirms that the Group continues to trade in line
with its expectations for the year ending 31 March 2017.
Chris Malley, Chief Executive of the Company, said:
"The acquisition of FLTC adds significant skills and
capabilities to our Wipac business and will provide us with both an
immediate step up in design capability as well as a base to further
expand our design resources in the Czech Republic. Whilst we have
been expanding our UK based talent pool considerably over the last
few years through a combination of recruitment and training, the
rate of growth that we project at Wipac would have been constrained
by the level of available UK resources. Having worked closely with
FLTC for over three years, we are confident that we can seamlessly
integrate their talented people into our business thus adding
critical design capacity to support our future growth plans while
adding additional expertise. We also believe that having a
footprint in continental Europe, and specifically in the heart of
the Czech Republic's automotive industry, will place us in an
excellent position to further grow our Wipac brand. We are
delighted to be strengthening our relationship with the FLTC
team."
Ends
For further information please contact:
Carclo plc 0192 426 8040
Chris Malley, Chief Executive
Robert Brooksbank, Finance
Director
Peel Hunt LLP (Corporate
broker) 020 7418 8900
Justin Jones
Matthew Brooke-Hitching
Weber Shandwick Financial
(Financial PR) 020 7067 0700
Nick Oborne
About Carclo
Carclo plc is a public company whose shares are quoted on the
Main Market of the London Stock Exchange.
Carclo's strategy is to develop and expand its key manufacturing
assets in markets where there are significant further opportunities
to drive shareholder value. To enhance profit margins and support
its customers, the group has been investing across its global
footprint.
Approximately three fifths of group revenues are generated from
the supply of fine tolerance, injection moulded plastic components,
mainly for medical products. The balance of group revenue is
derived mainly from the design and supply of specialised injection
moulded LED based lighting systems to the premium automotive
industry.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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