16th Feb 2015 09:33
LONDON (Alliance News) - Machine tools and laser marking company 600 Group PLC Monday said it has issued its first tranche of loan notes to raise around GBP6.7 million, part of which it will use to repay existing debt and for working capital, but around half of which will be used to pay for the acquisition of an 80% stake in US-based laser marking business TYKMA Inc.
The company bought an 80% stake in TYKMA for an initial consideration of USD4.7 million.
The first tranche of the loan notes will raise an aggregate of GBP6.7 million, with up to an additional GBP1.8 million to be raised via the issue of future loan notes, the company said in an statement. That would raise a maximum total of GBP8.5 million. The loan notes have a five-year maturity and carry an 8% coupon.
The remaining 20% stake in TYKMA is currently retained by its management team. However under the terms of the acquisition, a put option exercisable no earlier than April 1, 2017 and a call option exercisable no earlier than April 1, 2018 allow 600 Group to acquire the remaining 20% stake.
"The directors believe that the combined business will realise significant benefits from its additional scale and market penetration, together with enhanced operational and engineering capabilities," the company said.
600 Group said the TYKMA business will be fully integrated with its existing laser business, Electrox, and together they will used to create a new UK subsidiary, Electrox Laser Ltd, it said.
In 2013 TYKMA reported a net operating income of USD0.73 million and generated USD8.40 million in revenue.
600 shares were up 5.7% Monday morning at 15.85 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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