(Alliance News) - SDI Group PLC on Friday reported the acquisition of Gloucestershire, England-based Severn Thermal Solutions Ltd, as it continues to pursue its acquisitive growth strategy.

The Cambridge, England-based maker of scientific and technology products for digital imaging and sensing control applications said it has acquired Severn Thermal Solutions, a designer and manufacturer of high temperature furnace systems and environmental chambers for advanced material processing and testing.

The net consideration of the transaction is GBP4.75 million, excluding the GBP3.75 million of cash acquired under the transaction.

Broken down, the transaction includes a GBP7.8 million cash consideration payable on completion, a GBP480,000 deferred cash consideration expected to be paid shortly after completion and gross and net cash acquired of GBP3.6 million.

SDI said the initial cash consideration will be funded from its revolving credit facility with HSBC UK Bank.

Its shares climbed 11% to 79.00 pence on Friday morning in London.

SDI anticipates the acquisition being immediately earnings enhancing, adding that Severn Thermal Solutions is a profitable business that will provide it with expansion into the controlled environment market.

For the year to September 30, said SDI, Severn Thermal Solutions reported GBP2.4 million in revenue, earnings before interest and tax of GBP1.1 million, and adjusted Ebit of GBP880,000.

SDI Chief Executive Stephen Brown said: "Severn is a growing, profitable business, aligning with our key investment criteria of targeting scientific and industrial niche markets with global reach. Severn benefits from a strong, experienced management team who will remain in place, maintaining its sustainable sales pipeline, supported by significant international exposure.

"We are excited by the prospects for this acquisition, both as a standalone entity and in the cross-sell opportunities to other businesses across the group. We continue to pursue our acquisitive growth strategy alongside our organic growth programme."

By Christopher Ward, Alliance News reporter

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