© daniel schweinert dreamstime.com Electronics Production | July 28, 2014
Stadium acquires United Wireless Ltd
Stadium Group Plc acquired United Wireless Ltd a specialist in the design and manufacture of electronics for the machine-to-machine (M2M) wireless sector, for a maximum total consideration of £8m in cash and shares.
Stadium will pay an initial consideration of £6.0m to acquire United, to be satisfied by £5.0m in cash and the balance of £1.0m by the issue of 1,515,152 Stadium shares on completion. The cash consideration will be paid using a new five year revolving credit facility of up to £5m provided by Stadium’s existing banking partner HSBC. Application has been made for admission of the Initial Consideration Shares to trading on AIM and dealings are expected to commence on 31 July 2014. United is being acquired on a cash and debt free basis. Charlie Peppiatt, Chief Executive Officer of Stadium, said: "This acquisition establishes Stadium as a credible player in the fast growing market for M2M Wireless Devices. The successful integration of United will deliver the next step of our strategy to become a design-led electronics business by adding wireless connectivity to our integrated technology offering. I am confident that this acquisition will generate significant value for Stadium shareholders. “As we stated in our pre-close trading update earlier in the month, trading in the first half of the year was in line with management expectations and significantly ahead of the same period last year and we remain confident about prospects for the year. I look forward to updating shareholders following the release of our financial results for the six months ended 30 June 2014 on Tuesday, 9 September 2014.” The current owners and joint managing directors, each of whom will remain with United, have agreed to retain the Initial Consideration Shares for a minimum period of two years following Completion. The Company will make an additional earn-out payment of up to £1.33m in Stadium shares and £0.66m by way of loan notes if United exceeds certain defined earn-out targets.