e2v technologies plc, the specialist developer and manufacturer of high technology components and sub-systems,
announces that its subsidiary, e2v Holdings, Inc., has conditionally agreed to buy QP Semiconductor,
Inc. for an initial cash consideration of US$65m.
In addition, deferred consideration of up to US$15m may be payable to QP shareholders, subject to future operating profit performance targets being achieved by QP. e2v may satisfy up to US$5m of the deferred consideration through the issue of new
ordinary shares to the QP shareholders. All other deferred consideration is to be issued in cash. The overall cash consideration will be funded through existing bank facilities.
QP is a well established and leading US-based designer and supplier of specialty
semiconductor components used in military and aerospace applications. Its
extensive product range addresses a niche sector within this market, designed to
performance in extreme conditions.
- QP will strengthen the Group's market position in high reliability
specialist semiconductors as well as expand e2v's business from this niche
sector by c. 40%
- QP achieved compound annual sales growth of 27% from 2005 - 2007, with 2007 operating margins of 35%
- The enlarged Group will benefit from the ability to better service complementary global markets
- Establishes a US manufacturing base servicing the aerospace and defense sector
- Interest cover and net debt/EBITDA on acquisition anticipated to return to March 2008 levels within an acceptable time frame
- Earnings enhancing in the financial year ending March 2009 and materially earnings enhancing in the year ending March 2010*
* This statement is not intended to constitute a profit forecast for the year
ending 31 March 2009, for the year ending 31 March 2010, or for any other
period. Nor should this statement be interpreted to mean that earnings per share
be greater or less than those for the relevant preceding financial period for
e2v. Rather, this statement should be construed as a reference to an enhancement
above the earnings (before amortisation of bought-in intangibles) that might
have been earned
during the relevant financial period.
Completion of the acquisition is conditional on the approval of e2v's
shareholders, which will be sought at a General Meeting to be held on 18
September 2008. Completion is also conditional on the receipt of certain other
regulatory approvals and is
expected to take place on 30 September 2008. A circular will shortly be posted
Keith Attwood, Chief Executive said:
``We are delighted to announce the proposed acquisition of QP, which represents
a significant opportunity for the Group and is an important step in establishing
an operational footprint in the USA. It will increase our market share in the
and defence sector and expand our relationship with contractors to the US
Department of Defense.''
``This acquisition will significantly enhance our presence in the high
reliability specialist semiconductor market and the board believes that the
acquisition of QP will deliver earnings enhancement in the financial year ending
March 2009 and material
enhancement in the year ending March 2010.''
SOURCE: e2v technologies