Tuesday, November 6, 2012

Sale of Jena Tec to Kuroda Precision Industries Ltd. (“Kuroda”) of Japan

Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, medical and industrial sectors, announces that it has agreed the sale of its Industrial division, comprising the Jena Tec sub-group of companies (“Jena Tec”), to Kuroda, of Japan, for a cash consideration of £13.45 million (the “Sale”). Highlights: • Cash consideration of £13.45 million • Avingtrans now focused on Aerospace and Energy & Medical Divisions • Aerospace continues to thrive with record order book • Board continues to evaluate potential acquisition targets • • Disposal of Jena Tec provides certainty of funding The Board believes that the Sale will enable Avingtrans to fully focus on its two core sectors through its remaining divisions, namely Aerospace and Energy & Medical, which together contributed revenues of £32.2 million and earnings before interest and tax (“EBIT”) of £1.8 million (before group costs and impairment of goodwill) during the year ended 31 May 2012 and currently employ 548 people. The proceeds of the Sale will be used to invest further in the growth of these divisions and to reduce debt, whilst the Board also continues to evaluate acquisition targets that it believes will enhance long-term shareholder value. The Industrial division contributed revenue of £11.8 million and EBIT of £1.3 million during the year ended 31 May 2012. At that date, the gross assets of Jena Tec were £12.6 million. The division was constructed by Avingtrans from a series of small acquisitions over several years, which originally cost approximately £4 million in total. Jena Tec employs 178 people across its operations based in Germany, the UK, USA and China, all of whom are expected to transfer to Kuroda. Jena Tec’s principal business is the design, manufacturing and servicing of Precision Ballscrews, Spindles and Linear Motion actuation systems for automation and control of CNC machines and precision instrumentation. The final procedural steps for the disposal will be completed on Thursday, November 8th. Steve McQuillan, Chief Executive, of Avingtrans commented: “Whilst Avingtrans is in the enviable position of having three solid, profitable businesses, our overall size and corporate structure has meant that we have been unable to invest in each of the businesses to the degree that we would like and thereby maximise the opportunities available in each of our divisions. “The sale of Jena Tec provides us with a more focused business and the proceeds will allow us to invest for future growth. Our Aerospace division has been thriving and our order book at the financial year end remained at record levels. The creation of Sigma Composites in February is evidence of our ability to create value by targeted investment and we will continue to explore opportunities which would improve our customer reach or product offering and thereby further strengthen our position in this attractive market. “The Energy and Medical division had a difficult period last year, but is well placed to recover in the second half of this financial year, as the volume of activity with Siemens increases. We have continued to cement our key relationships within this division and add further customers, which will enable us to prosper in the years ahead. “We are very proud of all that we have achieved with Jena Tec during our stewardship, including consistently improved sales and profitability. We believe it is well positioned to continue on this growth path under its new owners and we wish our friends there, the employees and Kuroda all the very best for the future. ”