The proposed acquisition of original design manufacturing firm Etion Create will boost JSE-listed Reunert’s manufacturing and original design capabilities, as well as its export market access into key targeted international geographies.
On May 20, Reunert Applied Electronics entered a share purchase agreement to acquire 100% of the Etion subsidiary for an initial amount of R168-million on a cash-free and debt-free basis.
It is envisaged that the purchase price, excluding the potential successful recovery of a receivable of about R2.6-million and the accrued interest will amount to about R197-million. The maximum purchase price is R210-million.
The acquisition, subject to the fulfilment of the conditions precedent, is strongly synergistic with existing assets in the Applied Electronics segment, said Reunert CEO Alan Dickson during the company’s interim results presentation on Thursday.
“The company wishes to expand its Applied Electronics segment and believes that the augmentation of its existing assets with the strategic positioning, value proposition and original design manufacturing skills of Etion Create will accelerate these ambitions.”
Etion Create will provide the group with original design capability for the design integration and support of advanced technology in the market sectors of mining and industrial; defence and aerospace; the Internet of Things and sensors; and cybersecurity, locally and internationally.
The value of the net assets of Etion Create as at September 30, 2021, was R159.4-million and the profit attributable thereto for the six-month period then ended was R15.7-million.
The deal is subject to the fulfilment of outstanding conditions precedent by no later than November 20.
In addition to this acquisition, the group acquired all the shares held by SIBU Private Equity in Terra Firma Solutions for a purchase consideration of R20.9-million.