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Judges Scientific PLC shares rose on Monday after it reported that it bought Geotek Holding Ltd and Geotek Coring Ltd for up to £80 million in its largest acquisition to date.
Judges Scientific shares were trading 11% higher at 7,600.00 pence each in London on Monday morning.
The London-based scientific instrument sector investor will pay an initial cash consideration of £45 million on completion. Further, it will pay a contingent consideration of up to £35 million through a mixture of cash and new ordinary shares in Judges.
The cash consideration will be funded from its new £100 million club facility led by Lloyds Banking Group PLC, alongside Santander UK PLC and Bank of Ireland Group PLC.
Geotek Holding is a developer and manufacturer of instruments used to measure and log various characteristics of geological cores, while Geotek Coring is a supplier of related services.
Geotek, in the year to April 30, recorded revenue of £7.3 million and a pretax profit of £1.5 million. Trading during the year was ‘severely’ hurt by the Covid-19 pandemic and Judges' considers the three-year average to be more reflective of the firm's historic profitability, it said.
Its average annual operating profit for the three-year period ended April 30, amounted to £6.3 million.
Judges expects the acquisition to be ‘materially’ earnings enhancing for 2022.
‘This is the group's twentieth, and largest, acquisition,’ Chair Alex Hambro said. ‘This cash generative and earnings enhancing acquisition fits within Judges' disciplined acquisition strategy’.
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