Judges Scientific acquires Teer Coatings in £12m deal

Specialist scientific instrument investor Judges Scientific announced the acquisition of Magsputter, the holding company of Teer Coatings, on Thursday.

The AIM-traded firm said Teer Coatings manufactures coating instruments and provides coating services, with the acquisition expected to be immediately earnings-enhancing for Judges.

It said the acquisition was completed for initial cash of £12.3m.

An additional payment could be made to account for any excess working capital, which was anticipated to be covered by the cash balance inherited at the time of completion.

Financially, Magsputter's consolidated accounts for the year ended 31 January saw net assets of £6m and a profit before tax of £1.8m.

Adjusted EBIT, reflecting post-acquisition costs and after deducting notional rent for Teer's property, stood at £1.74m.

The initial purchase price was calculated as six times adjusted EBIT, plus the independently-valued property owned by Teer.

Judges Scientific financed the acquisition and associated transaction costs through its existing bank facilities.

Magsputter was originally established to facilitate the management buyout of Teer in 2019, with key members of the buyout team, including sales and marketing director Wayne Southall and technology director Dr Hailin Sun, would remain with the company, while commercial director Angela Byrne planned to retire within six months of the acquisition's completion.

“We are pleased to incorporate Teer, a market leader in its niche, into the Judges group,” said chairman Alex Hambro.

“The board believes that Teer, with its outstanding scientific competence, will prosper in Judges, and we welcome them to the Judges team.”

At 0949 BST, shares in Judges Scientific were up 1.99% at 10,351.5p.

Reporting by Josh White for Sharecast.com.