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PipeHawk Acquires UK Ground Penetrating Radar Maker Utsi Electronics.

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Vincent

MANews-(C)2009-2021

UK-based PipeHawk (LSE: PIP) has acquired the entire issued share capital of Utsi Electronics Ltd. for a maximum consideration of GBP 2m (USD 2.74m), the company said.

UtEl is a UK based manufacturer and designer of a range of special purpose ground penetrating radar systems which are sold around the world under the Groundvue brand through mature distribution channels.

With these products and markets being complementary to those of PipeHawk's own brand systems, the board of PipeHawk believes the acquisition will provide an enlarged portfolio of GPR system offerings into a significantly wider range of markets as well as offering excellent opportunity to extend R and D activities into the highly desirable Environmental/Water/Structural Faults markets and increase unit profitability across the dual product ranges achieved through enhanced marketing, rationalised designs and parts sourcing.

In the year ended 5 April 2020, UtEl recorded unaudited revenues of approximately GBP 398,300 and an unaudited profit before tax of approximately GBP 150,750.

As at 5 April 2020, UtEl had net assets of approximately GBP 715,000.

The consideration for the acquisition will be satisfied as an initial cash payment of GBP 500,000, subject to adjustment based on UtEl's net asset value on completion, with any excess over GBP 500,000 to be satisfied as 50% in cash and 50% in ordinary shares in PipeHawk (based on the company's volume weighted average price of a PipeHawk ordinary share for the preceding 30 business days).

In addition, UtEl will be entitled to further earn out consideration equivalent to 50 % of the profits before tax attributable to UtEl...

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