Gooch & Housego PLC Aerospace and Defence Acquisition (9230Z)
September 06 2018 - 1:01AM
UK Regulatory
TIDMGHH
RNS Number : 9230Z
Gooch & Housego PLC
06 September 2018
For immediate release 6 September 2018
Gooch & Housego PLC
("G&H" or the "Company")
Aerospace and Defence Acquisition
Fibre optic consolidation and enhanced access to US Aerospace
and Defence customers
Gooch & Housego PLC (AIM: GHH), the specialist manufacturer
of optical components & systems, announces that it has acquired
the trade and assets of Gould Technology LLC, trading as Gould
Fiber Optics ("GFO") for a total consideration of up to US$16.4
million. This acquisition strengthens G&H's position as the
world leader in fused fibre optic technology and provides enhanced
access to strategic US Aerospace and Defence customers.
GFO
Founded in 1978 and headquartered in Baltimore, MD, USA, GFO is
a specialist in the design, development and manufacture of fibre
optic components and sub systems.
GFO is a market leading supplier of key enabling components into
tier 1 US Aerospace and Defense customers.The GFO product range is
highly complementary to that of G&H. Whilst G&H is the
leading manufacturer of high reliability undersea fused fibre optic
components, together with a strong presence in the life sciences
and fibre laser markets, GFO specialises in the supply of
polarisation maintaining ("PM") fibre components to the US defence
market.
This acquisition enables G&H to take another step towards
meeting its strategic objective of further diversification in its
core markets. GFO brings the technology and routes to market
required for G&H to access the US Aerospace and Defence fibre
optic market, an area that had previously been largely denied to
the Company, due to International Trade in Arms ("ITAR")
regulations. In turn G&H's much larger US salesforce/ business
development group and the combined broader based product portfolio
should provide the platform for greater expansion within this
sector.
Acquisition terms
The total consideration payable by G&H is up to $16.4
million. This comprises initial consideration of US$13.0 million,
funded from a new US$40 million revolving credit facility from our
bankers, RBS, together with US$1.4 million of new G&H shares.
In addition, there is a deferred contingent cash consideration of
up to a further US$3.4 million, based upon the performance of the
business over the period to 30 September 2019.
The Company has made an application to the London Stock Exchange
for 73,183 new Ordinary Shares to be admitted to trading on AIM. It
is expected that admission will become effective on or around 12
September 2018.
The historical annual revenue of GFO was c.US$6.3 million,
underlying operating profit was c.US$1.6 million, taking into
account the investment we expect to make into the Baltimore
facility and the staff base. The acquisition is expected to be
earnings enhancing in the first full financial year of G&H's
ownership. Gross assets acquired were c.US$1.5 million.
Mark Webster, Chief Executive Officer of Gooch & Housego,
commented:
"This acquisition enables us to take another step towards
diversifying our business, allows G&H access to previously
restricted markets, as well as reducing, still further, the
Company's dependency on what remains a cyclical micro-electronics
sector.
"GFO is a high quality business, with a long standing tier 1
Aerospace and Defence customer base, complementary technology and a
strong financial track record.
"We are very much looking forward to working with the
management, staff and customers of GFO."
For further information
contact: -
Mark Webster / Andrew Boteler Gooch & Housego PLC 01460 256440
Mark Court / Sophie Wills Buchanan 020 7466 5000
Patrick Robb / David Anderson Investec Bank plc 020 7597 5970
Notes to editors
1. Gooch & Housego is a photonics technology business
headquartered in Ilminster, Somerset, UK with operations in the USA
and Europe. A world leader in its field, the company researches,
designs, engineers and manufactures advanced photonic systems,
components and instrumentation for applications in the Aerospace
& Defence, Industrial, Life Sciences and Scientific Research
sectors. World leading design, development and manufacturing
expertise is offered across a broad range of complementary
technologies.
2. All financial information included in this announcement is
sourced from unaudited management accounts and excludes any
specific items. This announcement contains certain forward-looking
statements that are based on management's current expectations or
beliefs as well as assumptions about future events. These are
subject to risk factors associated with, amongst other things, the
economic and business circumstances occurring from time to time in
the countries and sectors in which G&H operates. It is believed
that the expectations reflected in these statements are reasonable
but they may be affected by a wide range of variables which could
cause actual results, and G&H's plans and objectives, to differ
materially from those currently anticipated or implied in the
forward-looking statements. Investors should not place undue
reliance on any such statements. Nothing in this announcement
should be construed as a profit forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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