Senior completes components takeover for up to £78m
Manufacturing group Senior has completed the acquisition of Lymington Precision Engineering, a maker of precision-machined components, for an initial £45.8m in cash rising to a possible £77.5m based on performance.
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The group said the acquisition will be funded using existing borrowing facilities; a new one-year term loan amounting to £25m and a new two-year £20m revolving credit facility.
In a statement released on Tuesday, the FTSE 250 group added it could pay an additional £31.7m for the company, depending on Lymington’s performances over the next 12 months.
Senior added that it expected its financial performance over the next year to be worse than in 2014 due to the current short-term uncertainties in the oil and gas markets, which account for 85% of Lymington’s total sales.
However, “the acquisition is still expected to be immediately earnings enhancing. Following the acquisition, sales to the oil and gas sector will represent approximately 5% of group revenue," the company said.
In the year to 31 March, Lymington’s revenue is expected to have increased 19.9% to £51.2m, while profit before interest, tax, depreciation and amortisation are expected to have climbed 28.6% to £9m.
Senior shares were up 2.77% to 327.70p at 08:56 on Wednesday.