SDI Group wings in with potential £12m+ acquisition of PRP Optoelectronics

SDI is a buy and build group focused on companies which design and manufacture specialist lab equipment, industrial & scientific sensors and industrial & scientific products.

It is buying PRP Optoelectronics in Swindon for £9.3m net but the cash consideration paid immediately on completion will ramp to £11.3m and a deferred payment of £0.8-0.9m, subject to working capital completion accounts, will be paid to the sellers completion.

PRP designs and manufactures custom high performance microLEDs, LED light engines and monolithic LEDs for a range of applications within the avionics, defence and industrial sectors.

A profitable and growing business, it services a critical and technical niche, particularly within the aerospace and defence markets where its products are essential components in a number of programmes including the Eurofighter Typhoon, F-16 and F-22 Raptor.

The acquisition extends SDI's footprint into the resilient and lucrative aerospace and defence sector, including a stable blue-chip customer base and revenues primarily linked to overseas end markets.

Also, the inclusion of PRP's LED micro-displays for optical systems and UV purification products create a complementary offering to SDI, strengthening the Group's footprint across the specialist end markets occupied by both Graticules Optics and MPB Industries.

For the year ended December 31, PRP delivered revenues of £5.99m and reported EBIT of £1.54m (unaudited management accounts) and showed net assets of £4.43m, which includes cash.

Stephen Brown, CEO of SDI Group, said: "The acquisition of PRP is a significant milestone for SDI, marking our entry into the avionics markets. The business boasts a range of products in a very particular niche, which have applications across multiple sectors, including in aviation and on platforms, including the General Dynamics F-16 and Airbus A320 among others.

"PRP is a profitable business, with strong revenue visibility and an international customer base which meets our key acquisition criteria. We're enormously excited to welcome the PRP team into the Group and looking forward to working with them as they execute on their new business pipeline, and as we continue to drive the Group forward with our organic and inorganic growth strategies."

Law firm Birketts advised SDI Group on the acquisition. The Birketts team was led by Corinne Spencer (Legal Director, Corporate) and supported by Macauley Alsford-White (Associate, Corporate), Anvita Oswal (Advocate, Corporate), Julia Harlock (Senior Associate, Commercial Real Estate), Robbie Watson (Senior Associate, Corporate Tax) and Tess Bryson (Solicitor, Corporate Tax).

Corinne Spencer said: “This is another great acquisition for SDI Group and, as always, it’s been a real pleasure to work with the team at SDI and assist the group in achieving its acquisitive growth strategy. Congratulations to both SDI Group and the PRP team. We are excited to see how this acquisition strengthens and expands SDI’s capabilities across its specialist technology portfolio.”