Solid State acquires Gateway Electronic Components

Value-added component supplier Solid State has acquired ferrite and magnetic components and solutions specialist Gateway Electronic Components for an initial consideration of £1.4m.

Solid State said on Wednesday that Gateway will join Solsta, its components division, providing the firm with access to an enlarged sales force and customer base, enabling incremental mid-term cross-selling opportunities.

The AIM-listed group stated the acquisition was expected to be earnings-enhancing, and accretive to the gross margin of its components division in the first full year.

Solid State added that the acquisition would be funded from existing cash resources, with the initial cash-free, debt-free consideration of £1.4m to be followed by an advanced net asset cash adjustment of £100,000 to be paid on completion. A final payment was expected to be made once completion accounts have been finalised to settle on a pound-for-pound basis, the net cash and the net asset adjustment, which was expected to be roughly £500,000.

As of 1030 BST, Solid State shares had nosedived 77.02% to 270.0p

Reporting by Iain Gilbert at Sharecast.com