Avingtrans to acquire remaining capital in Adaptix

Avingtrans plc (LON:AVG), the engineering technology group, has announced a trading update in respect of the financial year ended 31 May 2023. The Board is pleased to report that the results for the year ended 31 May 2023 are expected to be in line with market expectations*. The momentum from FY23 has continued into FY24 and the current order book has continued to strengthen leaving us with a record order book for this time of year.

The Group is also pleased to announce that it has secured a number of positive contract wins throughout the period, notably in the nuclear sector, several of which have been set out below.

Hayward Tyler Luton has secured a £3.3m follow-on order, for Forsmark nuclear power station in Sweden to support the life extension programme there. This follow-on order is expected to be delivered in the next 18 months and comes after the initial £10m order in 2019, which was completed in 2022.

A £1.6m order for Hayward Tyler Luton from a Polish nuclear power station, owned by the energy group Enea, also for a life extension programme.

A $2.5m order for Hayward Tyler in Vermont from KHNP, ordered via Doosan in South Korea, to support upgrades in relation to nuclear regulatory requirements.

Energy Steel in Michigan received its first order from TerraPower, for equipment worth $1m. TerraPower is a next generation nuclear power company, backed by Bill Gates, which is now building a demonstrator plant.

Possible Acquisition of Adaptix

Avingtrans announces that it has submitted a proposal in connection with the conditional acquisition of the remaining issued share capital and to be issued share capital of Adaptix Ltd, the emerging MedTech business based in Oxford, for a total consideration of up to £3.0m (being up to 100 pence per ordinary share).

The Proposal has been accepted by the majority of Adaptix shareholders on a conditional basis with Adaptix (in accordance with its obligations under its Articles) inviting various other parties to submit a competing proposal for the entire business, or its assets, by 21st July. Should no superior competing offer be received at that point, then the Proposal will be accepted and completion of the acquisition would be subject to the satisfaction of certain conditions.

Should the Proposal be accepted, the Consideration is to be satisfied entirely through the issue of Avingtrans shares, to be issued following the completion of the acquisition.

There can be no certainty that the Proposal will be accepted, even if the pre-conditions are satisfied or waived, or a superior offer for Adaptix emerges. In addition, Avingtrans has the ability to withdraw its offer at any time up to exchange of contracts, since the offer remains subject to the approval of the Avingtrans Board.

Background to Adaptix

Since the Group first completed a minority investment in October 2021, Adaptix has made successful progress towards its 3D X-ray technology, with over 28 patent families and over 300 patents filed to date. Most recently, Adaptix was awarded 510k clearance for its novel orthopaedic product by the US FDA in March 2023. The Board believes that the potential acquisition will give the Group a market leading position in novel imaging products, as applied to (eg) veterinary and orthopaedic imaging at the point of care, notably when considered in parallel with the Group’s existing interest in novel MRI products, via Magnetica.

Avingtrans currently owns 667, 333 ordinary shares in Adaptix. The total issued share capital of Adaptix is currently 3,708, 044 ordinary shares.

Avingtrans will make further announcements in due course, as appropriate.

Notice of Results

Avingtrans expects to publish its results for the twelve months ended 31 May 2023 on Wednesday 27 September 2023.

The management team will be hosting a presentation for analysts on the day of results – for more information please contact Zach Cohen at IFC Advisory on zach.cohen@investor-focus.co.uk

Steve McQuillan, CEO of Avingtrans, commented:

“We are delighted by the performance of the Group in what have been difficult market conditions, including on-going supply chain disruptions, albeit that these have eased somewhat from their nadir. Despite the headwinds, order intake has been robust, notably growth in Engineered Pumps and Motors (EPM) has been particularly strong. As a result, we are pleased that the Group is entering FY24 with the best order cover since prior to the pandemic which leads the Board to view the outlook for this year with confidence.”

*Consensus FY23 Revenue, Adjusted EBITDA & Net Cash of £108.9m, £13.5m & £13.6m respectively

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