TP Group acquires Wiltshire-based technology business

Engineering firm TP Group has acquired Wiltshire-based outfit Westek Technology for an initial consideration of £3m, funded from existing resources.

The AIM-listed group said its acquisition of Westek, which provides rugged, high-performance computer servers and ancillary equipment for military and industrial customers in the UK, Europe and the US, was expected to be earnings accretive for the full financial year ended 31 December 2019.

TP will make a maximum additional payment of £500,000 on delivery of certain transition activities within the 12 months following the completion of the acquisition.

The company told investors the acquisition was a “strategic addition of proven capability in the design and manufacture of advanced electronic systems” and also offered vertical integration opportunities with the rugged control systems already delivered with its packaged equipment offerings.

In its last trading year, Westek reported revenues of £3.5m and pre-tax profits of £200,000. As of 31 December 2017, Westek had gross assets of £2.3m.

Chief executive Phil Cartmell, said: “This acquisition complements our existing activities in complex, rugged equipment, yet in a different application area and with different customers. The integration of Westek into the Group will, I believe, add significantly to their outreach and accelerate their growth whilst contributing to the success of TPG.”

As of 1040 BST, TP shares had slipped 1.56% to 6.30p.