Key Technologies makes strategic acquisition
MIDLANDS-based specialist engineering group Key Technologies is set to acquire the business and assets of Primetake, a specialist developer, manufacturer and supplier of special purpose ammunition and equipment.
The deal, for an undisclosed sum, is to be financed from Key Technologies’ own cash resources, new bank facilities and new funds from shareholders. The acquisition, which is subject to shareholders’ approval, is expected to be completed on June 8.
Based in Lincolnshire, privately-owned Primetake was established in 1991. It manufactures bird scaring cartridges to increase aircraft safety at airports, door-breaching rounds used by military and police units, secure cabinets for police forces for the storage of equipment and specialised ammunition for UK and foreign police, security and defence forces.
In the latest published accounts, for the 18 months ended October 31, 2009, Primetake reported sales of £15.2m for the 18-month period covered by those accounts and had underlying EBIT (earnings before interest and taxes) of £5.8m. The business currently has 54 employees.
Pro-forma accounts for the year to October 31, 2009 show continuing sales (after deducting those related to a discontinued business) of £11.4m, with underlying EBIT of £2.8m.
David Miller, group chief executive at Key Technologies, said: “Primetake is a specialist business with a strong international customer base and a reputation for supplying high quality and reliable products and proven capability to meet customers’ niche requirements.
“The new acquisition will fit in well alongside our existing defence business. We see opportunities to build market share through working with our existing customer partnerships and through winning new UK and export customers.”
He said the group would continue to invest in product development and improving production efficiency.
Key Technologies, which is headquartered in Cradley Heath, has production facilities there and in Gosport in Hampshire and Wimborne in Dorset. The group is focused on the supply of specialist products to the defence and rail sectors.
David Grove, Key Technologies’ chairman, said: “The acquisition of Primetake, which we believe to be a quality business and a great acquisition for us, is a major step for the group, one which meets our aspirations for growth in the defence sector.
“The deal is in line with our strategic plan to build on our core business in the defence and rail sectors through selective, earnings enhancing acquisitions as well as further organic growth.”
Key Technologies reported interim results in March 2010 showing sales of £11.8m for the half year to December 31, 2009, up 15.7% on the same period in the previous year. The group also reported an underlying profit before tax of £1.37m, against £1.25m in the previous year, representing an increase of 9.4%.
