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Specifically designed for the Explosive Method of Entry (EMOE) role, BREACH is a small, low cost, waterproof and robust addition to the BDL Systems range of Radio Frequency Initiation Equipment. Capable of the initiation of any number of receivers over ranges up to 200m, BREACH provides explosive assault teams with a safe and reliable answer to the breaching requirement.
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Description of the business and reasons for the acquisition BDL, based in Poole, Dorset, manufactures radio frequency initiators and hard-wired exploders used for the remote detonation of demolition charges, primarily for bomb disposal. It also manufactures electronic countermeasure equipment and under-vehicle surveillance systems, and supplies third party bomb-disposal equipment to help military and homeland security forces counter the ever-increasing threat of Improvised Explosive Devices (IEDs).
In the year ended 31 March 2006, BDL reported an audited profit before tax (after non-recurring costs of £0.2 million) of £0.97 million on turnover of £4.7 million. Gross assets as at that date were £3.1 million. The acquisition is expected to enhance Chemring's earnings in the first full financial year post-completion.*
BDL's range of products complements the bomb-disposal and demolition stores currently produced by Chemring's Energetics division, and BDL and Chemring have worked together for many years selling each other's products. In addition, BDL's strong presence in IED protection and new geographic regions opens further growth opportunities for the Group. BDL will become part of Chemring's Energetics division which now has operations in the UK (Derby, Portsmouth, Ardeer and Corsham), the US, Germany, Spain and Australia.
Principal terms of the acquisitionThe consideration of £9 million was paid in cash, utilising existing bank facilities. The consideration is subject to adjustment depending on the working capital of BDL at completion.
Commenting on the acquisition, David Price, Chief Executive of Chemring, said:
"The acquisition of BDL will substantially enhance our capabilities in the Explosive Ordnance Disposal (EOD) market and complements our existing demolition products. The global EOD market is almost £2 billion per year and offers a considerable opportunity for growth in the future. The growing threat from Improvised Explosive Devices can only enhance our prospects."
Paul Rayner, Finance Director of Chemring, said:
"The acquisition price of £9 million represents an historic post-tax price earnings multiple (excluding non-recurring costs) of approximately eleven times. We have funded the acquisition utilising existing facilities with Bank of Scotland, and whilst the acquisition will increase gearing in the short term, the cash generated by the enlarged Group will reduce gearing levels during 2007."
For further information:
Dr David Price
Chief Executive, Chemring Group PLC
01489 881880
Paul Rayner
Finance Director, Chemring Group PLC
01489 881880
Rupert Pittman
Cardew Group
0207 930 0777
* This statement should not be taken to mean that the earnings per share of Chemring will necessarily match or exceed the historical reported earnings per share of Chemring and no forecast is intended or implied.
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| BDL Systems Ltd are pleased to announce the award of a contract of significant value by the Canadian DND for the supply of a large quantity of the Mini RABS RF Initiation Equipment. The contract is awarded after a small number of equipments were successfully used by Canadian Troops on operations over the last two years. BDL Systems are proud to be able to continue in our support of the Canadian DND. |
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