Flowtech Fluidpower In Share Placing To Buy Balu For GBP10 Million (ALLISS)

14th Mar 2018 09:10

LONDON (Alliance News) - Technical fluid power products maker Flowtech Fluidpower PLC said Wednesday it raised up to GBP11.0 million through a share placing in order to fund its GBP10.2 million acquisition of Balu Ltd.

Fluid power services firm Balu - trading under its Beaumanor and Derek Lane subsidairies - will serve as a "complementary" acquisition, Flowtech said, "creating a co-ordinated approach to three major catalogue brands in the UK market place".

"We are delighted to announce the acquisition of Balu which brings together three major catalogue brands in the UK market place and again widens the customer base we serve," Flowtech Chief Executive Officer Sean Fennon said. "It also gives us the opportunity to add a second logistics centre in Leicester which should deliver stock optimisation and supply chain improvements across the group and operationally de-risk the main Skelmersdale site."

As part of the acquisition, Flowtech announced it had raised up to GBP11.0 million through the issue of 6.5 million shares to institutional investors, equivalent to a 11% stake in the enlarged capital of the firm. The 170 pence each placing price represents a 3.8% discount to the closing price on Tuesday.

Shares in Flowtech were 0.1% higher at 177.00 pence on Wednesday.

The funds will be used to fund the acquisition and to strengthen Flowtech's balance sheet.

After admission - expected on Thursday - Flowtech will have 59.6 million shares outstanding.

Fennon said the successful placing "demonstrates clear support from both new and existing shareholders for our ongoing strategy to develop a focused fluid power group that serves a wide number of industry sectors".

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