Solid State snaps up rival in £2.4m deal

REDDITCH-based electronics group Solid State has bought component distribution business 2001 Electronic Components for £2.4m.

Solid State said Hitchin-based 2001 Electronic Components is a complementary business as there is minimum overlap with its core offering.

2001 Electronic Components, which has an annual turnover of £7.2m, is a niche, distributor of electronic components. Its business is similar to Solid State Supplies but the group’s existing component distribution business. 2K1, has minimal overlap in terms of product lines, suppliers or customers.

Solid State suggests that the combination will provide increased strength and depth to the group’s product range, facilitating access to larger principals and providing opportunities for greater sales of higher margin own brand products and value added services.
 
Solid State has also announced that that it has raised approximately £2.4m through a placing of 1,050,000 new ordinary shares.
 
The proceeds of the placing will be used to part fund the acquisition and also to provide additional working capital resources to the group. 
 
Gary Marsh, chief executive of Solid State, said: “The acquisition of 2K1 gives Solid State greater scale and opportunity in the components market in addition to a more equal balance in the group’s revenues. 

“We are delighted with the support of our new institutional shareholders in the oversubscribed placing.  We look forward to updating the market on the integration of 2K1 and further achievements at Solid State in due course.”

Meanwhile, Solid State has announced a 22% dip in turnover (from £15.77m last year to £12.29m) in its (unaudited) results for the six months to September 30.

Profit after tax was down by 8% from £578,000 to £533,000.