Sensor and testing equipment specialist Spectris (SXS) announced its first acquisition since announcing the £403 million sale of its Omega Engineering business in April.
The company has signed a purchase agreement to acquire California-based Dytran Instruments for £66 million.
While the size of the deal is modest, that shouldn’t detract from what it can bring to the business and investors have given the news the thumbs up - marking the shares 3.7% higher to £29.51.
This comes despite the relatively full price being paid for the business at 15.8 times EBITDA (earnings before interest, tax depreciation and amortisation).
Dytran is a leading designer and manufacturer of ‘piezo-electronic and MEMS-based accelerometers and sensors’ - in plain English these are devices used for measuring acceleration, dynamic force, pressure and vibration.
‘AN EXCELLENT ADDITION’
Its largest geographic market is North America and its kit is used in the space, aerospace and automotive industries.
The plan is to integrate Dytran into Spectris’ existing HBK business, which already specialises in accelerometers and to take advantage of the latter’s global sales network.
Spectris chief executive Andrew Heath says: ‘Dytran is an excellent addition to HBK, bringing complementary technology and strengthening our sensor offering to customers in the fast-growing accelerometer market.’
Shore Capital analyst Tom Fraine commented: ‘We view this relatively small acquisition positively. The EBITDA multiple is considerably above the group’s 11 times 2022 forecast EV (enterprise value)/EBITDA multiple, but a discount to the businesses that Spectris has disposed over recent years, many of which generated lower margins and growth rates than the group average.’
