Elektron Technology completes sale of Sheen Instruments

The AIM-traded company said the transaction was executed through Industrial Physics' Dutch subsidiary, Büchel, for a total gross consideration of approximately £1.2m cash of which £1.1m was received on completion and approximately £0.1m was due in October 2018 subject to any adjustment for unforeseen liabilities.

Industrial Physics was described as a “platform company” of Union Park Capital, a US-based private equity firm specializing in industrial technology.

Sheen is a manufacturer and supplier of inspection and testing instruments used in the paint, coating, automotive and other industries.

In the year ended 31 January, the sales of Sheen were £2.6m and ‘brand contribution’ was £0.2m.

Elektron said brand contribution is an internal measure of profitability before the allocation of certain group-pooled costs such as finance, information technology and human resources.

After making a deduction for a fair share of those costs the board estimated Sheen's operating profit to be £0.1m for the year to 31 January.

“The cash proceeds will be used by Elektron for working capital purposes,” its board said in its statement.

“The disposal will be dilutive of earnings initially but the board expects to improve the performance of the remaining businesses.”

The disposal was part of the Group's rationalisation of its portfolio, further focusing its investment on its remaining businesses namely Bulgin, Checkit, Elektron Eye Technology and Queensgate.