1st Apr 2014 08:10
LONDON (Alliance News) - GKN PLC shares jumped Tuesday after the company said it has acquired the entire issued share capital of Williams Hybrid Power Limited from Williams Grand Prix Engineering Limited in an initial GBP8 million deal.
The deal is an extension to a working relationship between GKN and Williams Hybrid Power; the firms have been working together to validate the use of Williams' technology and now that this stage has been reached, GKN said "it is appropriate [for GKN] to use its global resources and manufacturing capability to maximise the commercial opportunities that exist."
The acquisition comprises of a cash consideration of GBP8.0 million payable at closing, together with potential uncapped additional consideration payable based upon future sales of WHP products in the following 10 years.
The FTSE 100-listed company said the additional consideration will be calculated at 3.5% of sales in each of the first five years, declining on a stepped basis to 1.5% by the end of the 10 year period, and shall only be payable to the extent that it cumulatively exceeds GBP4.0 million.
The acquisition will be funded from GKN's existing resources, said the firm.
Williams Hybrid Power specialises in the design and manufacture of composite flywheel-based energy storage systems, initially exploring options for the bus, truck and tram markets. For the financial year ended December 31, 2013, WHP made a loss after taxation of GBP1.0 million and had gross assets of GBP3.2 million.
Shares in GKN jumped in early trading, 1.82% higher at 397.4 pence per share Tuesday, one of the biggest gainers on the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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