Acal acquires Variohm, proposes placing, says Q3 trading steady

Acal has confirmed the acquisition of Variohm Holdings Ltd and a proposed placing to raise about £14.1m gross at 220p a share.

Acal -- an international supplier of customised electronics to industry -- said trading in Q3 was in line with management expectations. It retained its FY earnings forecast.

Meantime, the consideration for Variohm comprised an initial £12.0m in cash, with further contingent and conditional cash consideration of up to a maximum of £1.85m.

Acal said the deal was highly complementary to its existing businesses and represented a further step in its strategy of growing its Design & Manufacturing division with highly differentiated niche and customised electronic components.

"The Board expects the acquisition to bring immediate benefits to the group," said the company adding it was expected to enhance Acal's underlying earnings in the first full year post-completion ending 31 March 2018.

The initial consideration was funded from the group's syndicated debt facility.

Net proceeds of the underwritten placing would be used to repay the acquisition funding, to fund any future contingent payment and for working capital and general corporate purposes.

At 15:15 GMT, shares in Acal were up 0.87% to 232p.