Product category: Communications ICs (Wired)
News Release from: Hero Electronics
Edited by the Electronicstalk Editorial Team on 17 May 2006
Hero joins Advanced
Power Components stable
Advanced Power Components has acquired the entire issued share capital of Hero Electronics for a total consideration of approximately GBP 2 million in cash
Advanced Power Components, a specialist distributor of electronic components and manufacturers' representative, has acquired the entire issued share capital of Hero Electronics, for a total consideration of approximately GBP 2 million in cash. The consideration comprises GBP 440,000 for goodwill and approximately GBP 1,560,000 for the net assets, subject to adjustment for the actual value of the net assets on completion.
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Of this total consideration, GBP 500,000 will be deferred and paid in six quarterly instalments over the next 18 months.
In addition, an amount equal to 37.5% of the agreed inventory value included in the net assets on completion will be held on retention and paid over a period of 24 months to the extent that the relevant stock is sold during that period.
Hero is a commercial electronic component distributor addressing four main product areas comprising ICs and crystals, electronics and sensors, LEDs and displays.
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The acquisition of Hero will not only add a number of new product lines to those currently offered by APC but will also significantly increase the company's customer base.
In the audited accounts for the twelve months ended 31st October 2005, Hero reported revenues of GBP 2,372,000 and a profit before tax of GBP 33,000.
As at 31st October 2005, Hero's net assets were GBP 1,556,000, including cash balances of GBP 889,000 and inventory of GBP 356,000.
Following the acquisition, the company intends restructuring its organisation to provide a more comprehensive product and service offering, as follows: Hi-Rel - to distribute a variety of specialist electronic components into the defence and aerospace sectors; Hero - to distribute a variety of electronic components into commercial and industrial markets; Go! Technology - to provide a kitting and materials management service to companies wishing to outsource noncore activities, offering services ranging from material procurement to full production management; and SBM - to represent manufacturers of electronic components addressing general industrial and consumer markets.
Mark Robinson, Chief Executive, commented: 'We believe that this is an excellent acquisition for the company, enabling APC to expand both its product range and customer base'.
'This transaction represents a significant step towards the company's return to profitability'.
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