2nd Sep 2019 09:26
(Alliance News) - Automotive industry-focused testing firm AB Dynamics PLC said Monday it acquired US automotive industry products maker Dynamic Research Inc for up to USD24.7 million.
AB Dynamics will pay an initial cash consideration for the California-based business of USD21.0 million, with a further conditional cash payment of up to USD3.5 million dependant on performance for the year ending May 2020.
A further USD200,000 payment is payable on the determination of the final closing net assets of the firm.
AB Dynamics expects the acquisition will be earnings enhancing within the first year following acquisition.
For the financial year ended this past May, Dynamic Research generated USD3.7 million in operating profit from revenue of USD13.7 million.
For the year ended August 2018, AB Dynamics generated GBP7.9 million in operating profit in revenue of GBP37.1 million. Pretax profit stood at GBP7.0 million.
"The acquisition supports our strategy to complement long-term, sustainable organic growth with attractive acquisitions," AB Dynamics Chief Executive Officer James Routh said. "This strategy is disciplined and highly targeted against defined strategic, operational, financial and cultural criteria and DRI clearly meets those criteria."
"DRI has an outstanding reputation in the field of advanced driver assistance systems testing product technology and is a business that AB Dynamics has known, worked with and respected for many years, significantly de-risking the process," Routh added.
"We believe the transaction will not only increase the group's access in the growing US market for ADAS and autonomous vehicle testing and verification, but also complements our technical capabilities and facilities," Routh continued. "Together we will be unrivalled in ADAS track testing products and well positioned for future growth in an evolving landscape."
Shares in AB Dynamics were 1.3% higher at 2,786.50 pence in London on Monday.
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