10th Mar 2014 07:52
LONDON (Alliance News) - Senior PLC Monday said it has agreed to acquire UPECA Technologies Sdn Bhd, a Malaysian-based manufacturer of high-precision engineered components serving the aerospace and energy sectors, in a GBP75.5 million deal that the FTSE 250 manufacturer expects to boost earnings with immediate effect.
In a statement, Senior said the GBP75.5 million deal is made up of the GBP58.2 million in cash it will pay for the company and GBP17.3 million of net debt it will take on. The deal will be funded using cash and existing borrowing facilities.
Senior, which operates through an aerospace division and a flexonics division, said it expects the deal to complete towards the end of March. It is acquiring UPECA from Millennium Arena Sdn Bhd, a holding company for UPECA's private shareholders.
The flexonics division provides emissions products for land vehicles and industrial process control.
Senior Chief Executive Mark Rollins said the deal represents "an excellent addition" that will strengthen the manufacturer's aerospace and energy market presence in South East Asia.
"UPECA's 20 years of experience, its impressive capabilities, and its own strong customer relationships, combined with Senior's wider market access and financial strength, are expected to create an excellent platform to enhance the future growth prospects for the whole Senior group," Rollins said in a statement.
UPECA has two manufacturing facilities in Malaysia, one selling to the aerospace industry and the other to the energy market, and a third facility in China.
According to Senior, UPECA employs around 625 people across its three operations, and the existing management team will continue to manage the business.
Approximately one third of UPECA's revenue comes from from the aerospace market and two thirds from the energy, oil and gas market, Senior said.
For the year ended March 31, 2013, UPECA reported the Malaysian ringgit equivalent of GBP28.0 million in sales and a GBP6.3 million trading profit before interest, tax and depreciation, Senior said. The amounts were quoted by Senior at an exchange rate of 5.5 ringgit to the pound.
The company added that UPECA expects to report the equivalent of GBP31.3 million in sales and GBP7.4 million in profit before interest, tax and depreciation for the financial year ended March 31 2014.
Senior shares Friday closed at 289.70 pence.
By Samuel Agini; [email protected]; @samuelagini
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