26th Jul 2005 06:01
FOR IMMEDIATE RELEASE 26 JULY 2005 CHEMRING GROUP PLC ACQUIRES ENERGETIC MATERIALS BUSINESS Chemring Group PLC ("Chemring") announces that it has entered into a bindingagreement to acquire Comet GmbH, Pyrotechnik-Apparatebau ("Comet"), asubsidiary of Diehl Stiftung & Co KG, for a cash consideration of ¢â€š¬9.6 million(‚£6.7 million). The acquisition is expected to complete in August or September2005, subject to regulatory approval.Description of the business and reasons for the acquisitionComet, based in Bremerhaven, Germany, manufactures and supplies a range ofmilitary and marine pyrotechnics.In the year to 31 December 2004, the sales of Comet's military and marinepyrotechnics business were ¢â€š¬16 million and the operating profit was ¢â€š¬0.7million. At 31 December 2004, Comet had net assets of ¢â€š¬6.1 million.Comet's military pyrotechnics, which include a range of innovative battlefieldsimulation products, complement those sold by PW Defence Limited, a Chemringsubsidiary based in Derby, UK. Comet's marine pyrotechnic products arecomplementary to the range of SOLAS (Safety of Life at Sea) approved marinepyrotechnics currently produced by Chemring.The acquisition strengthens significantly Chemring's ability to compete inthese market areas, particularly in Europe, and is expected to be earningsenhancing in the first full financial year post-completion.*Principal terms of the acquisitionThe consideration of ¢â€š¬9.6 million will be paid in cash, utilising increasedbank facilities. The consideration will be subject to adjustment depending onthe net assets of Comet at completion. It is anticipated that, following fairvalue adjustments by Chemring, the net assets of Comet will be valued at alevel not substantially different to the consideration.Commenting on the acquisition, David Price, Chief Executive of Chemring, said:"The acquisition of Comet will substantially enhance our position in both themilitary and marine pyrotechnic markets. This valuable addition to ourEnergetic Materials division offers an attractive opportunity to consolidatesome of our global production activities, and to generate good volumes andmarket-related synergies.It represents an important initial step in our strategy to establish ourselvesas a leading player in the Energetic Materials market."* This statement should not be taken to mean that the earnings per share ofChemring will necessarily match or exceed the historical reported earnings pershare of Chemring and no forecast is intended or implied.For further information:Dr David Price Chief Executive, Chemring Group PLC 01489 881880Paul Rayner Finance Director, Chemring Group PLC 01489 881880Jonathan Rooper Cardew Group 0207 930 0777 ENDCHEMRING GROUP PLCRelated Shares:
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