Sean Fennon, Chief Executive, Flowtech Fluidpower plc LON:FLO commented: “This Acquisition represents a further strengthening of the Group offering to the hydraulics marketplace, delivering a greater depth of technical expertise along with a strengthening of our core product set.
“We continue to work on a number of other opportunities which we fully expect, over the coming months, to reach positive conclusions on. As we have previously stated, our targeted approach ensures we can achieve both a concentration and enhancement to our product set which is, and will continue to be, core to our business model.”
AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE:FLO), has told DirectorsTalk about the further strengthening of its Power Motion Control division through the acquisition of Hi-Power Limited and the business and certain assets of Hi-Power Hydraulics Limited a distributor of hydraulic equipment components and, systems design & build predominantly to the mobile and transport sectors.
Hi-Power Limited was founded 40 years ago and holds a market leading position in the Republic of Ireland. Today, Hi-Power holds a number of long-term customer relationships across its Republic of Ireland and Northern Ireland operations. The business employs in total 38 people across its sites in Cork, Dublin, Belfast and Manchester.
The Acquisition provides another complementary business to the Group’s PMC division, delivering incremental revenue through a wider customer channel and extends Flowtech’s position with important European suppliers further boosting the divisional offer.
In Ireland, Hi-Power Limited will operate as an independent sister company within the PMC division and will continue to be managed by the current Hi-Power executive management team who have been in place for a number of years. The UK operation, Hi-Power Hydraulics, will become a trading division of Primary Fluid Power and will report to its Managing Director, Paul McGrady.
For the year ended 31 December 2016, Hi-Power achieved sales of GBP6.9 million producing EBIT of GBP0.4 million. Net assets excluding net cash and property at the same date were GBP1.9 million. As well as some immediate back office savings, the Group expects to deliver synergy opportunities over the medium term through coordinated operational activities, particularly in Dublin and Manchester, as well as wider commercial opportunities through collaboration with the division’s other Irish operation, Nelson Hydraulics.
The Acquisition completed on 22 June 2017 is being funded from the Company’s own resources and comprises GBP1.9 million on completion with additional payments expected to be cGBP0.5 million subject to an earn-out over the 18 month period to 31 December 2018. The maximum consideration payable is GBP3.5million.
In summary, the Board of Flowtech remain very encouraged about the future; the Group will provide a business trading update to the market in mid-July ahead of scheduled Half-year results, which will be released in September.
(Note: The majority of the consideration to be paid in Euros. The above values have been converted at an exchange rate of 1.14 EUR/GBP)
