Volex Acquires Servatron

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Volex, the global supplier of complex assemblies for performance-critical applications and power products, has signed an agreement for the acquisition of all of the issued stock shares and stock units of Servatron Inc. for a total consideration of up to $28.5 million, including the assumption of net debt of approximately $6.7 million (the acquisition). The transaction is expected to close on July 31, 2019, subject to customary closing conditions.

Headquartered in Spokane, Washington, Servatron currently supplies printed circuit board assemblies (PCBAs), box builds, and complete sub-assembly solutions from a single manufacturing site in the USA. For the year ended December 31, 2018, Servatron generated sales of $35.6 million and profit before taxation of $2.5 million. As a result of strong growth in the six months ended June 31, 2019, it generated sales of $23.1 million and profit before taxation of $2.0 million.

Background to the Acquisition 

Servatron's business is a complementary fit with Volex's strategy to maintain and build leading positions in niche sectors with structural growth drivers and defensive characteristics. Servatron adds complementary technologies including PCBA manufacturing, state-of-the-art test capabilities, and higher-level system integration.

Anticipated Benefits from the Acquisition

  • By combining our cable-assemblies expertise and R&D skills, we will drive revenues for the newly enlarged Volex
  • Servatron adds complementary test technologies, higher levels of system integration, and PCBA assembly expertise
  • A strengthened footprint in North America
  • Increased organic growth through value-added services for our existing cable harness customers
  • The incorporation into our business of a skilled local workforce and management team
  • The opportunity for further expansion of PCBA capabilities in other production locations


The equity consideration of up to $21.8 million comprises:

  • $12.9 million in cash paid on completion of the acquisition (completion)
  • $2.3 million satisfied by the issue of 2,233,712 million ordinary shares in Volex (the consideration shares) on completion
  • Up to $3.5 million in cash, which may be payable within two years of completion based on certain profit targets of Servatron being met
  • Up to $3.1 million to be satisfied by the issue of 2,962,478 million ordinary shares in Volex within two years of completion based on certain profit and employment targets being met

The consideration shares are subject to a six-month lock-up. Application has been made to the London Stock Exchange for the admission of the consideration shares to trading on AIM (admission). Admission is expected to take place at 8:00 a.m. on August 5, 2019.

Following the issue of the consideration shares, the issued share capital of the company will comprise 149,601,645 ordinary shares of 25 pence, each with one voting right. This figure may be used by shareholders in the company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the company.

Commenting on the acquisition, Nat Rothschild, executive chairman of Volex, said, "It is an extremely high-quality and well-managed business, which will now be able to access our unique global footprint. Our own world-class cable assemblies division gets a diverse range of interconnect products and integrated solutions to offer our existing accounts. This is a win-win deal."

The information contained within this announcement is deemed by the company to constitute inside information under Article 7 of the Market Abuse Regulations (EU) No. 596/2014. The person responsible for arranging the release of this information is Mr. Daren Morris, CFO of the company.



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