TIDMLPA

RNS Number : 1922U

LPA Group PLC

22 January 2025

22 January 2025

LPA G r oup plc

("L PA ", the " Compan y" o r the " Group ")

Acqu i si ti on of Power Business

LPA Group plc, the innovation -le d engineering special i st in elect roni c and elect ro - me c h a ni cal com ponent s and syst em s, is p l e as ed to a nnoun c e th a t an agreement h as been s igned to acq uire the U K trade a nd assets of a power suppl y provider (the "Acq ui si tion") .

LPA h as re ac hed agreement with Eaton Electrical Products Limited to acquire Eaton's P owertron business. The A cq ui si tion i ncl ud es the UK tr ad ing divi si on and assets, incl uding its small manuf act uring capabil ity in Cam bridg eshi r e. The Acq ui si tion is c omp le mentary to a number of power suppl y produ cts the Com pany cur rent l y ma nuf ac ture s for the ra il indu s try . S ome of the c omponen ts being ou ts ou rc ed by the business will in future be manufactured by LPA in Yorkshire and given LPA's existing extensive sales network, the Group anticipates that it will increase these sales volumes over time.

The Acquisition, by way of an asset purchase agreement, results in LPA acquiring fixed assets, current assets and liabilities, the employment of approximately 20 members of staff, and the business including worldwide rights to brands and product designs. The consideration for the Acquisition is in th e fo rm o f LPA, t aking on th e obliga tio n to se ttle lease dilapida t ion obliga t ions expected t o be due in 2026 estimated at GBP200,000, taking on liab ility for an y cus to me r pr oduct w ar r ant y claims capped at in to tal GBP150,000, and a cash payment to the seller currently estimated at c.GBP17,000 calculated with reference to net working capital as at 31 January 2025. A f ai r value ex er cise w ill be car r ied out fo llo w ing completion of th e Acquisi t ion, and it is expec te d th a t th is w ill show t hat t he assets have been acqui r ed at a discou nt t o t hei r f ai r value.

Th e Compan y anticipates th e Acquisition will be broadly neutral to FY25 profit , and that it will make a small and growing cont r ibution t o G ro up p ro fits ove r time wit h t he e x pec t ed inc re ase in sales volumes. Impo r tantl y it w ill align w i t h th e Compan y 's st r ateg y of transitioning its fac torie s to manu f ac t u r e mo r e s t anda r dised p r oduc t s wit h dec r easing r eliance on Ne w P r o j ec t deli very sales.

Th e business the subject of t he Acquisi t ion achieved rev enues for th e y ea r ended 31 Decemb er 2023 of GBP2.1 million, a loss befo r e t ax o f GBP77,000, and ne t assets being acquired are estimated cu rr entl y at app r oximatel y GBP565,000 (calculation excludes any accrual for lease dilapida t ion obliga t ions) (all unaud ite d ) .

It is expe c ted th a t c omp le tion of the Acquisition w ill occur in Q1 calendar 2025, s ubje c t to TU PE consul tati ons, the tran s fer of the bu ild in gs leas e a nd fin alisa tion of net working ca pita l.

Robert Ho rvath, C hair m an sai d: "Th e addi t ion of m or e stable mon t h on mon t h pr oduct is a key par t of our ongoing st r ateg y t o keep our manufact ur ing uni t s pr oducti v e and t his A cquisi t ion, impo rta n tly w ill suppor t ou r deli very against our st r ateg y . T his A cquisi t ion, and t he acquisi t ion o f th e Red Box business announced las t year, wh ile both small, are going t o make a signi f icant di ffer ence to mon th ly sales vo lumes th a t w e can build upon, suppor t ed by ou r i nter national dis tr ib ut ion net w o r k. We are also seeing good pr og r ess in inc re asing th e sales in t he connect or side of ou r aviation business as w ell as ou r Channel dis tr ib ut ion business."

For further information, please contact:

 
 LPA Group plc                               Tel: +44 (0) 1799 
  Robert B Horvath, Chairman                  512800 
  Philo Daniel, Chief Executive Officer 
  Stuart Stanyard, Chief Financial Officer 
 Cavendish Capital Markets Limited           Tel: +44 (0) 20 7220 
  (Nominated Adviser & Broker)                0500 
  Corporate Finance 
  Ed Frisby / Isaac Hooper / Elysia 
  Bough 
  Corporate Broking 
  Tim Redfern 
 Hudson Sandler (Financial PR)               Tel: +44 (0) 20 7796 
  Dan de Belder                               4133 
  Nick Moore 
  Francesca Rosser 
 

Abou t LPA

LPA Group plc (AIM : LPA) is an inn ov a t ion-led enginee rin g specialist in elect r onic and elect r o- mechanical componen t s and s y s t ems.

Focused on tr anspo rt (r ail and aviation), de f ence, inf r ast r uc t u r e and indust r ial marke t s and suppl yi ng i nt o hostile and challenging envi r onments, LPA is known for engineering solu t ions t o imp ro ve p ro duc t re liability, re ducing main te nance and life cycle costs.

The Group h as three si t es across the UK , sell ing to cust omer s in the UK a nd over seas. Two of the s e a re de s ign a nd m a nufa c turing s ite s : LP A C onne c tion S y s tem s - elect ro - me c h a ni cal syst em s for r ail, aviation and indu st ri al, and LPA Li ghting Syst em s - LED l ighting and elect roni c syst em s for r ail and infr ast ru ct ur e. The third si te i s LPA Channel Elect ri c - a value ad ded di s tributer of engineered c omponent s for r a i l, a er os p ace, a nd defen ce.

Wit h o v e r 160 y ea r s o f UK design and manu f ac t u r e, and wit h o r igins in t he f i r s t e v e r ligh t ins t alled in ' Electric A venue ' , B rixto n; innova tio n is co re to LP A and to th e p ro ducts and services supplied to ou r cus to mers w orld w ide.

Fo r mo r e info r mation visit www. lpa- gr oup.com

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January 22, 2025 02:00 ET (07:00 GMT)