26th Aug 2021 11:52
(Alliance News) - Volex PLC on Thursday said it has agreed to purchase the entire issued share capital of US-based Irvine Electronics Inc for a USD16.4 million consideration.
Hampshire, England-based Volex manufactures a wide range of electronic components and products including data centre infrastructure, circuit board assemblies, AC power cords, and electronic vehicle components.
Volex said its acquisition of the Irvine, California-based components manufacturer will expand its profile in North America, offering new opportunities in the "attractive" US defence market.
"Our strategic intent is to develop Volex's presence in the defence and military aerospace markets, adding further blue-chip customers involved in long-term programmes and partnerships," said Executive Chair Nat Rothschild.
Upon completion, the company expects the acquisition to enhance both its earnings and printed circuit board assembly capabilities.
"This acquisition is indicative of our ongoing [mergers and acquisitions] strategy which, along with our pursuit of operational excellence and organic growth, will assist Volex as we target USD650 million in revenues and USD65 million of underlying operating profit by 2024," Rothschild added.
The company said its USD16.4 million consideration represents 3.5 times Irvine's adjusted earnings before interest, tax, depreciation and amortisation in 2020.
Irvine reported adjusted earnings before interest, tax, depreciation and amortisation and adjusted pretax profit of USD4.7 million and USD4.6 million respectively during 2020, the company said.
The above figures exclude the impact of a one-off customer project and other non-recurring Covid-related adjustments, Volex noted.
Shares in Volex were trading up 2.0% at 385.51 pence each in London on Thursday morning.
By Scarlett Butler; [email protected]
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