Stadium Group buys PowerPax for £2.8m

AIM-listed Stadium Group, a supplier of design-led technologies, has acquired the business and assets of PowerPax UK for a total cash consideration of £2.8m, in a deal that is expected to be earnings-accretive in the first full year of ownership.

This is the fifth value-adding acquisition made by the group in the last five years and Stadium said it strengthens its power division through the addition of complementary products and customers.

Based in Theale, Berkshire, PowerPax is a specialist value-added manufacturer and distributor of a wide range of power supplies, battery chargers and LED products, including AC-DC switch mode power supply units and DC-DC converters. Formed in 2000, the business has well established relationships with suppliers and is recognised as a specialist in the low to medium power space.

The deal will be financed from existing cash resources and through an increased debt facility with Stadium's existing lender, HSBC. In order to support plans for further accelerated growth both organically and through acquisition, HSBC has agreed to increase the existing £5m revolving credit facility to £15m on a three-year term, with the option for a further two-year extension.

Chief executive officer Charlie Peppiatt said: "PowerPax is an excellent synergistic fit for Stadium's power division; fully aligned with our growth plans for design-led technology products and ideally placed to seamlessly integrate its highly complementary product line into Stadium Stontronics. We expect to see the full financial benefits of this acquisition from 2018 onwards."

At 0850 BST, Stadium shares were up 4.8% to 132p.