LONDON, UK: Xaar plc, the leading inkjet printing technology group, has acquired Megnajet Ltd and Technomation Ltd, whose businesses trade together under the name of Megnajet.
Post acquisition it is intended that the businesses of Megnajet Ltd and Technomation Ltd will be merged and the combined business will continue trading under the Megnajet name.
Megnajet is one of the leading designers and manufacturers of industrial ink management and supply systems for digital inkjet.
The acquisition will accelerate Xaar’s growth strategy by creating a more integrated inkjet solution whereby customers can access more of the printing ecosystem (such as ink supply systems and the electronics) from Xaar.
Megnajet offers a broad product range including one of the most integrated and compact ink management and supply systems, and will form part of the end-to-end solution helping Xaar’s UDI customers reduce their development timescales and shorten their time to market while attracting a broader range of commercial opportunities for Xaar.
The initial cash consideration for the acquisition of Megnajet Ltd comprises £1.8 million, with an additional £0.2 million deferred consideration to be paid in two years’ time.
The initial cash consideration for the acquisition of Technomation Ltd comprises £1.8 million, with an additional £0.2 million deferred consideration to be paid in two years’ time.
The combined initial consideration and deferred consideration for the acquisition is being funded from Xaar’s existing resources. Megnajet Ltd and Technomation Ltd are both being acquired on a cash free, debt free, and normalised working capital basis. Amounts will be adjusted up or down following completion subject to completion accounts within 60 days, and will be satisfied in cash.
For the year ended 28 February 2021 Megnajet Ltd generated a profit before tax of £0.3 million and had gross assets of £1.3 million (unaudited). For the year ended 31 January 2021, Technomation Ltd generated a profit before tax of £0.4 million and had gross assets of £0.6 million (unaudited).
The Board expects the acquisition to contribute an annualised revenue of approximately £3 million and to be earnings accretive in the current financial year ending 31 December 2022.
Graham Strudwick, Technical Director at Megnajet, joins the Xaar Group as Director of System Component Integration.
John Mills, CEO of Xaar, commented “The acquisition of Megnajet will accelerate our growth strategy by enabling us to offer existing and new customers a more integrated inkjet solution.
“Having worked with Megnajet for several years we know the company has an excellent reputation within the inkjet industry for delivering compact and easy to integrate products.
“This acquisition is a great addition to our business and we are delighted to welcome everyone at Megnajet into the Xaar Group.”
Graham Strudwick, Director of System Component Integration, commented “This is an exciting opportunity for Megnajet and will ensure the company continues to develop and grow. Xaar has a great track record for innovation and leadership within the inkjet industry. We’re delighted to become part of the Xaar team”.
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