Judges Scientific subsidiary buys all of Crystallon

Bordeaux Acquisition, a majority-owned subsidiary of AIM-traded scientific instrument-focussed Judges Scientific, acquired 100% of the issued share capital in Crystallon on Tuesday, which itself is the holding company of Oxford Cryosystems.

The company said Long Hanborough-based Oxford Cryosystems manufactures cryogenic cooling systems used in x-ray crystallography and other applications.

Judges’ board said it expected the acquisition by Bordeaux to be immediately earnings-enhancing for the group.

The purchase price of Crystallon amounted to £4.495m in cash, Judges confirmed, with an additional payment to be made to reflect any excess cash and working capital over and above the ongoing requirements of the business.

Its board said it expected such payment to be covered by the cash inherited at the completion date.

In addition, an earn out would be payable if Crystallon's adjusted EBITA in the financial year ending 30 November exceeds £0.899m, with the amount payable to be five times any excess, capped at £1.576m.

“Oxford Cryosystems is an excellent company supplying first class products to a highly specialised global niche market,” said Judges Scientific chairman Alex Hambro.

“This cash generative and earnings enhancing acquisition is entirely consistent with the Judges model.”

Crystallon's consolidated accounts for the financial year to 30 November 2016 showed revenues of £4.75m and pre-tax profits of £1.39m.

Net tangible assets amounted to £1.4m, including cash of £0.87m.

Crystallon's consolidated revenues and operating profits for the year ended 30 November 2016, adjusted to eliminate non-recurring items and to reflect Oxford Cryosystems' ongoing cost base within Judges, would have totalled £4.3m and £0.90m respectively.

The acquisition was financed by Bordeaux via a new £4.5m five-year term loan granted by Lloyds Bank Corporate Markets and guaranteed by Judges, with associated transaction costs being funded from Bordeaux's cash resources.