9th Jul 2014 08:52
LONDON (Alliance News) - Technology group Cohort PLC Wednesday said it has acquired a majority stake in electronic communications and surveillance technology supplier Marlborough Communications Holdings Ltd from its management, for up to GBP8 million in cash.
Cohort said it is to initially pay GBP6 million in cash for a controlling stake in Marlborough Communications of 50% plus one share on a cash-free, debt-free basis. It said it may pay up to a further GBP2 million for the stake before the end of December, depending on the trading performance of the business in the financial year ending September.
Cohort said it also has agreed to acquire the remaining stake in Marlborough Communications, following the end of the 2016 financial year, of which it said a price would be determined by Marlborough Communications order book, and earnings performance in both the 2015 and 2016 financial years.
"Overall, the acquisition will strengthen and broaden the group's portfolio and is expected to be immediately earnings enhancing. We retain significant funds to consider further acquisition opportunities," said Chief Executive Andrew Thomis in a statement.
Cohort said it is paying for the acquisition from its existing cash resources.
Surrey-based Marlborough Communications reported earnings before interest and taxes of GBP2.7 million in the financial year ended September 30, 2013, on GBP22.9 million in revenue. Revenue and earnings for the current financial year is expected to be lower, the company said, closer to the GBP12.4 million revenue and GBP1.9 million EBIT recorded in the 2012 financial year.
Cohort shares were up 2.9% at 212.55 pence Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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