£76m acquisition of French firm propels e2v to new plateau
e2v technologies, an Essex-based world leader in imaging sensors for the space sector, has made a milestone acquisition that fast-tracks its global growth strategy.
The Chelmsford company has made a bold £76 million bid to expand the company and enter the professional imaging market through the acquisition of French electronic components specialist, Atmel Grenoble.
If approved by shareholders, the all cash deal will increase e2v’s headcount by over one third to more than 1,600 staff worldwide and take revenue up by almost two thirds to around £180m.
e2v is underpinning the purchase with a new £150m banking facility and a £13.2m shares placing, which has lifted its share price almost 10 per cent, up 21.5 pence to 248 pence a share.
Lloyds TSB Corporate in Cambridge was joint lead bank in the deal.
e2v is one of the region’s outstanding technology companies, repeatedly landing contracts to provide systems for cutting edge science, particularly in the space sector.
The European Space Agency used it on its groundbreaking comet-chasing Rosetta mission and will use its technology to capture the images that will create the most accurate 3D map of the Milky Way galaxy to date.
e2v’s business strategy doesn’t allow the company to venture too far from existing markets and opportunities in well-established sectors.
But it does allow for accelerated growth through the acquisition of complementary businesses and technologies.
It has a leading position in the dental imaging sensor market as well as being an established supplier of cameras to the European defence and aerospace market.
Atmel Grenoble, a subsidiary of NASDAQ-listed Atmel Corporation, is a leading designer, manufacturer and distributor of specialised electronic components and sub-systems including image sensors and cameras, smart RF transceivers, aerospace-qualified microprocessors and broadband data converters.
In 2005 it employed an average of 452 permanent staff – plus an additional 103 contractors and employees on leave of absence – at its facilities in Grenoble, generating sales of Euros 101.6m (£70.6m) and profit before tax of Euros 13.7m (£9.5m).
The firm’s origins stretch back to a manufacturing site in Saint-Egreve in the mid-1950s and it was formerly known as Thomson-CSF Semiconducteurs Specifiques before being acquired by Atmel Corporation from Thales – then Thomson-CSF – at the turn of the millennium.
Atmel Grenoble has particularly strong ongoing relationships with a number of OEMs, which have been built up over a long period by its management team and the acquisition is expected to strengthen e2v’s position as a major global provider of specialised electronic components and sub-systems to leading OEMs, with a significant strengthening of the group’s position in the professional imaging sector.
e2v chief executive, Keith Attwood, said: "Atmel Grenoble is a great strategic fit for e2v and this acquisition will significantly strengthen our sensors sales across our core professional imaging market, whilst providing exceptional opportunities to extend our reach into existing market sectors with a broader range of products.
"In addition, we see cross-selling opportunities arising from the extended customer base that becomes available to the enlarged group. We expect that this strategic alignment and the synergies identified will lead to significant value creation for e2v shareholders."
Atmel Grenoble will not only extend e2v’s offering in key product areas and markets, it will extend its geographic footprint through Atmel’s diverse sales network, which extends across Europe, North America and the rest of the world.
Other benefits of the acquisition include: enhanced market position through increased scale and expertise; increased technological capabilities; strengthened product range offering cross-selling opportunities; enhanced competitive position in key geographies; strengthened research and development capabilities and opportunities for technology transfer; and opportunity to accelerate growth through synergies.
The final price of the deal is subject to a post-completion adjustment based upon the level of net working capital in Atmel Grenoble at completion and is expected to deliver material earnings enhancement to shareholders for the year ending March 31, 2008.
e2v has said the acquisition is not dependent on substantial consolidation of facilities or staff due to the current complementary nature of products designed and marketed by e2v and Atmel Grenoble.
The combined resources of the organisation will be able to focus on a broader range of market opportunities and more efficient technology and IP development. Attwood will remain chief executive of the enlarged group.
Neil Mackie, senior relationship director with Lloyds TSB Corporate – joint lead arranger and appointed agent for the acquisition – felt it would prove to be a landmark deal in e2v’s global growth strategy.
He said: "We helped e2v through the IPO process two years ago and this is a hugely significant deal for the company relatively soon after the float.
"It increases its turnover and fast-tracks where it wants to be on the international stage. We are enormously proud to be part of what is a real triumph for the company."