discoverIE Group PLC on Wednesday said it has acquired 2J Antennas Group, which will ‘form a new technology cluster’ with its own Antenova business.

The Surrey, England-based customised electronics manufacturer purchased 2J Antennas, which is based in Bardejov, Slovakia and has subsidiaries in the UK and US, for cash consideration of €52.5 million or £45.0 million. This will be funded from discoverIE’s existing debt facilities.

discoverIE said 2J is a leading designer and manufacturer of high-performance antennas for industrial electronic connectivity applications, and ‘has a long track record of profitable growth at operating margins significantly higher than the group average’.

discoverIE said 2J will ‘form a new technology cluster’ with Antenova, its existing antenna business, as part of its Sensing & Connectivity division. This, discoverIE said, will create ‘a leading platform in the long-term growth, high performance, industrial wireless connectivity market’.

‘2J is a business that we have known for some time, with a strong product range and engineering capability that is highly complementary to [Antenova],’ said Chief Executive Nick Jefferies.

‘By bringing the two businesses together, they will gain access to a greater number of industrial connectivity target customers with a broader product range and wider commercial support functions.’

Jefferies continued: ‘The industrial wireless connectivity market is an exciting one with excellent growth prospects and the acquisition of 2J increases discoverIE’s opportunities in the faster growing markets of the industrial internet of things, robotics and artificial intelligence controlled industrial systems.’

discoverIE said 2J delivered €18.1 million in revenue and €4.4 million in pretax profit in 2022, and that its integration with Antenova will realise operational and revenue synergies ‘with the acquisition exceeding the group’s stated returns target within four years’.

discoverIE expects the purchase to be ‘immediately’ accretive to its underlying operating margin, and accretive to underlying earnings during the first full year after the transaction is completed. Additionally, it said it continues to have a ‘strong’ pipeline of acquisition opportunities in development.

In June discoverIE had reported a positive 11.5% margin for the year ended March 31, up from 10.9% the year before, while underlying earnings per share had increased 20% to 35.2 pence from 29.4p.

discoverIE shares were up 0.3% at 740.28 pence on Wednesday morning in London.

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