The 600 Group PLC has completed acquisition of TYKMA Inc
The 600 Group PLC, the AIM listed distributor, designer and manufacturer of industrial products, is pleased to announce that it has agreed the acquisition of the remaining 20% of TYKMA Inc, the US based laser marking business it acquired 80% of in February 2015. The consideration will be satisfied by the issue of 12,000,000 1p ordinary shares in the Group and $1.8m in cash. The cash consideration will be funded by increased facilities from Bank of America.
The fully integrated TYKMA Electrox Laser Division is led by David Grimes who was the principal shareholder in TYKMA and who remains as the Laser Division managing director. As part of the transaction, David Grimes will receive 6,000,000 Ordinary Shares and $990,000 for his remaining shares in TYKMA. Following the completion of the transaction David Grimes will have an interest in 7,500,000 Ordinary Shares representing 7.19% of the enlarged issued share capital of the Group. In the year to 31 December 2014 TYKMA reported net operating income of $0.73m on revenues of $8.4m and had net assets of $1m at that time. The acquisition also eliminates the put and call in place on the remaining 20% of TYKMA, the value of which was based upon a multiple of the combined Laser Division's EBITDA. The combined Laser Division reported an operating profit of £0.63m on revenues of £6.57m for the six months to 26 September 2015.
Under the AIM Rules for Companies, the purchase of the minority stake in TYKMA from David Grimes is deemed to be a related party transaction. Consequently, the Directors of the Group, having consulted with Spark Advisory Partners Limited, as Nominated Adviser to the Company, consider the purchase of the minority stake in TYKMA from David Grimes to be fair and reasonable in so far as the shareholders are concerned. In providing advice to the Directors, Spark Advisory Partners Limited has taken into account the Directors' commercial assessment of this related party transaction.
Application will be made for the 12,000,000 new Ordinary Shares to be admitted to trading on AIM and it is expected that admission will take place on or around 6 April 2016. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares. Following this allotment, the total issued share capital of the Group will increase to 104,357,957 Ordinary Shares.
Commenting today, Paul Dupee Executive Chairman said:
'With the Laser Division now representing approximately 40% of the Group's profitability, we are pleased to be able to acquire 100% ownership and at the same time align the interests of its Divisional Managing Director, David Grimes, more closely with those of existing shareholders. TYKMA has consistently traded strongly since we acquired it over a year ago and the management team has done well to integrate operations in the UK and US as well as improving manufacturing efficiencies and driving sales growth to gain market share and accelerate profit growth and we are confident this will continue.'
'We're also pleased to report that trading conditions in our Machine Tools Division have improved in the last six weeks with stronger order books in both the US and Europe and some initial success through the new distributors we have established in S.E. Asia. Although it is difficult to anticipate if this will continue given the fragile economic conditions in many of the market we serve, we remain well positioned for growth wherever that may arise.'
About TYKMA Electrox
TYKMA Electrox is headquartered in Chillicothe, Ohio, USA and specialises in the design, production and distribution of industrial laser systems for a broad range of industrial manufacturing applications. These industrial laser systems are used for marking, traceability, branding, component identification and material processing on metals, carbide, painted or anodized materials, most plastics and many other substrates and have been incorporated into the production processes of numerous global companies operating in a variety of sectors including electronics, medical, tooling and automotive.