Image Scan to acquire Todd Research

X-ray imaging specialist Image Scan has entered into a conditional agreement to acquire British developer and manufacturer of X-ray systems for security purposes, Todd Research, from Supply 999 for £3.25m.

The consideration will be partially funded by £2m of vendor loan notes, with the remaining £1.25m to come from a placing of 25m new ordinary shares at 4p per share.

In the 12 months to 31 March, venture capital owned Todd Research reported audited revenues of £2.1m and generated a gross profit of £1.4m and a pre-tax profit of £470,000.

Image Scan said the acquisition presented an opportunity to acquire a "specialist security solutions business" providing it with scale, complementary products, high-quality earnings and access to accounts with UK government bodies, leading financial services and international blue chip corporates.

Executive chairman and chief executive Bill Mawer said: "We already know Todd Research well, having successfully sold their cabinet X-ray systems over the last two years.

"For us, the acquisition is about quality of earnings and growth and, with its recurring revenue, high profitability and synergistic product range Todd Research will significantly enhance our business."

As of 0900 BST, Image Scan shares had lost 9.18% to 5p.