TIDMMIDW
RNS Number : 2050T
Midwich Group PLC
13 November 2023
13 November 2023
Midwich Group plc
("Midwich", the "Midwich Group" or "the Group")
Acquisition of prodyTel Distribution Gmbh
Midwich Group (AIM: MIDW), a global specialist audio visual
distributor is pleased to announce that it has entered a binding
agreement to acquire prodyTel Distribution Gmbh ("prodyTel" or "the
Company"), a distributor of professional audio and technical
solutions products based near Nuremberg, Germany.
Through its German subsidiary Kern & Stelly Medientechnik
GmbH ("Kern & Stelly"), Midwich will acquire 51% of the
Company's share capital for initial cash consideration of EUR8.5
million (approximately GBP7.4 million). Put/ call options are in
place to facilitate the purchase of the remaining 49% of the share
capital in June 2024 for a fixed cash consideration of EUR8.1
million (approximately GBP7.1 million). An additional performance
linked amount of up to EUR5.5 million (approximately GBP4.8
million) will be payable in cash in 2026.
Based in Stein, on the outskirts of Nuremberg, prodyTel was
founded in 2003, originally as a manufacturer of audio codecs
before switching its focus to distribution in 2014. From there, it
has developed a strong vendor portfolio, including premium brands
Biamp, Aver and Jabra, with a particular focus on the corporate and
education market. The Company operates across Germany and employs
thirty staff.
prodyTel supplements its core distribution services with a suite
of value-add services for its trade customers throughout Germany.
These services include the prodyTel Academy, offering technology
seminars, training courses and product demonstrations to customers
from a dedicated 230 sq m space within the Stein facility.
In its latest financial statements, for the year ended 31
December 2022, the Company generated revenues of EUR22.0 million
(approx. GBP19.2 million) and profit before tax of EUR4.0 million
(approx. GBP3.5 million). Gross assets at 31 December 2022 were
EUR6.3 million (approx. GBP5.6 million).
prodyTel's net cash at signing was around EUR0.7 million (GBP0.6
million). Completion of the transaction is subject to merger
control clearance from the German Federal Cartel Office.
Stephen Fenby, Midwich Group Managing Director, commented:
"We are delighted to have reached an agreement to acquire
prodyTel, which will strengthen our technology offering in the DACH
region. prodyTel has a strong reputation in the market which has
enabled it to attract top tier brands. Customers greatly value the
expertise the Company is able to offer, and will now be able to
benefit from the combined portfolio of prodyTel and Kern &
Stelly. We look forward to working with Christian and his team to
build on the success the business has experienced in recent
years."
Christian Carrero, Managing Director of ProdyTel commented:
"Not only have I developed a lot of personal relationships over
the last 20 years with many people within the Midwich family, but
prodyTel has often found itself working alongside Kern & Stelly
on common projects. From these interactions, I had already
developed a positive feeling about the corporate culture in Kern
& Stelly.
I had quite a few offers to sell my company over the years, but
based upon these past interactions, when the opportunity presented
itself to join the Midwich family, it seemed only logical. I
believe this deal can bring prodyTel and its people to the next
level in distribution and equally will allow us to share our
expertise in audio and AV project management to support Kern &
Stelly to further grow its business in Germany.
Personally, I am really excited to contribute to the Group with
my 25 years of knowledge in the global AV market and am already
looking forward to many new and exciting projects and ideas within
Kern & Stelly and Midwich."
Further Details of the Transaction
The deal will be funded from Midwich's existing facilities and
is expected to be earnings enhancing in the first full year
following completion.
The maximum aggregate consideration (including
performance-linked consideration and net of cash at signing) for
the purchase of 100% of the Company is EUR21.4 million (approx.
GBP18.7 million) payable in cash.
Midwich Group plc
Stephen Fenby, Managing Director
Stephen Lamb, Finance Director +44 (0) 1379 649200
Investec Bank plc (NOMAD and Joint Broker
to Midwich)
Carlton Nelson / Ben Griffiths / Cameron +44 (0) 20 7597
MacRitchie 5970
Berenberg (Joint Broker to Midwich) +44 (0) 20 3207
Ben Wright / Richard Andrews 7800
FTI Consulting
Alex Beagley / Tom Hufton / Rafaella de +44 (0) 20 3727
Freitas 1000
About Midwich Group
Midwich Group is a specialist AV distributor, with operations in
the UK and Ireland, EMEA, Asia Pacific and North America. The
Group's long-standing relationships with over 600 vendors,
including blue-chip organisations, support a comprehensive product
portfolio across major audio visual categories such as displays,
projectors, technical AV, broadcast, professional audio, lighting
and unified communications. The Group operates as the sole or
largest in-country distributor for a number of its vendors in their
respective product sets.
The Directors attribute this position to the Group's technical
expertise, extensive product knowledge and strong customer service
offering built up over a number of years. The Group has a large and
diverse base of over 22,000 trade customers, most of which are
professional AV integrators and IT resellers serving sectors such
as corporate, education, retail, residential and hospitality.
Initially a UK only distributor, the Group now has over 1,800
employees across the UK and Ireland, EMEA, North America and Asia
Pacific. A core component of the Group's growth strategy is further
expansion of its international operations and footprint into
strategically targeted jurisdictions.
For further information, please visit
www.midwichgroupplc.com
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