Judges Scientific acquires Heath Scientific Company for £5.3 million

LONDON: Judges Scientific, the group focused on acquiring and developing companies in the scientific instrument sector, has acquired the entire issued share capital of Heath Scientific Company Limited, a world leading maker of calorimetry instruments.

The initial consideration for Heath is £5.3 million in cash. The consideration for the Acquisition has been financed from the Group’s £35 million acquisition facility from Lloyds Bank Corporate Markets. The Board expects the Acquisition to be immediately earnings enhancing.

Heath, through its subsidiaries Thermal Hazard Technology Limited and THT Inc., specialises in the design, manufacture and sale of instruments used to measure the thermal properties of lithium batteries and other reactive materials. Its main product, the Accelerating Rate Calorimeter, is a key tool to improve and verify the safety of lithium batteries and of other chemical reactions. This is an expanding market in light of the growth in the use of lithium batteries in electronic devices and electric vehicles.

The science underlying Heath’s products is similar to the scientific fundamentals of Fire Testing Technology, the Group’s first acquisition in May 2005. In addition, the aim of both companies is to improve the safety of the products manufactured by their customers. The Board believes the interaction between the two companies will be constructive.

Heath, based in Bletchley, Buckinghamshire, was established in 1994 by Martyn Ottaway (the Managing Director) and Phill O’Kane (the Sales and Marketing Director); they were joined in 1996 by Stelios Mores, the R&D Director. The founders, in some cases with their families, each owned approximately one third of the shares in Heath. Following the acquisition Martyn will retire but remain on the board of Heath as a non-executive director; his son Stephen, the Business Development Director, recently joined Phill and Stelios on the board and the three will lead the company in the future.

Heath’s accounts for the financial year to 30 April 2019 show revenues of £4.4 million and pre-tax profits of £0.7 million.  Net tangible assets amounted to £1.9 million, including cash of £0.8 million.  Heath’s operating profit for the year ended 30 April 2019, adjusted to eliminate non-recurring items and to reflect Heath’s ongoing cost base within Judges, would have totalled £879,000.

Alex Hambro, Chairman of Judges, said: “Heath is a world leading business in a focused global niche, selling quality products which are indispensable to the safety of the public. This cash generative and earnings enhancing acquisition fits within the Judges disciplined acquisition strategy.  We are delighted to welcome Phill, Stelios and Stephen and all their colleagues to Judges’ family.”

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