Business News
Domino acquires aps Alternative Printing Services GmbH for 15.2m
Thursday 21. August 2008 - Domino Printing Sciences plc is pleased to announce it has agreed terms for the acquisition, through its wholly owned subsidiary, Domino Holdings Deutschland GmbH (Domino), of 95% of the equity of aps Alternative Printing Services GmbH (APS).
APS is based in Herrenberg, Germany and develops and manufactures a range of innovative thermal inkjet printers, which are sold world-wide through subsidiaries in France and Australia and a network of distributors.
The initial price payable is 15.2m of which 13.9m will be paid at closing of the transaction on 31 August 2008. The balance of this initial sum will be paid in February 2010. Deferred consideration is also payable subject to and based upon the performance of the business over a three year period commencing on the date of the acquisition.
The APS vendors include key managers Werner Schäffer, Xavier Ferbo, Andrew Sharp and Michael Kögler. These managers collective beneficial ownership prior to acquisition totalled approximately 85%. They have all been retained on long term employment contracts.
Werner Schäffer will remain the sole minority shareholder with a holding in APS of approximately 5%. He has an option to require Domino to purchase his minority holding at any time during the next seven years. The price payable will be approximately 0.8m plus a variable element which is subject to and based upon the performance of the business.
The value of gross assets of APS at 31 December 2007 was 2.5m. Operating profits for the twelve months to 31 December 2007 were 0.4m.
The acquisition of APS is expected to be earnings neutral in the year to 31 October 2008 and earnings enhancing in future years.
This is the fourth acquisition by Domino Printing Sciences in the last year, including:
– acquisition of Control Information Technology GmbH for 4m in October 2007
– acquisition of Dominos Belgian distributor for 4.3m in November 2007
– acquisition of Photon Energy GmbH for 4m in June 2008
Nigel Bond, Group MD commented, “We are delighted to announce the acquisition of APS and to secure the services of the key managers, all of whom have substantial experience in the coding and marking industry. APS has developed certain know how and has patented ink technology that we believe will broaden the use and application of thermal ink jet products in Dominos core market areas. APS thermal ink jet products are enabling improved print quality at high speed and on an increasingly wide variety of substrates, in particular for 2D bar codes and other machine readable formats necessary to meet a range of applications including track and trace. The addition of these products to the Domino range will enhance and extend our capabilities.”
Note:
Deferred consideration and the final price of the minority share are dependent upon the financial performance of the business over a three year period. Sales and profit growth targets have been established with minima required before any additional consideration is payable. These minima are set at a level which requires earnings enhancement for the Group. On target performance of APS will mean additional payment of 8.5m. The maximum price that can be paid for significant out-performance of targets is 23.5m. Achievement of the maximum would be significantly earnings enhancing for the Group.