LONDON, UK: Concurrent Technologies, a UK-based company that specialises in high-end embedded computer solutions for critical applications, has announced that it has agreed to buy Phillips Machine & Welding Company, also known as Stryker, a US-based company that provides aerospace and military products and services, for $3.375 million (approximately £2.64 million).

The deal will enhance Concurrent Technologies’ strategic ambitions in the systems market, a market comprising of computer systems designed to operate in harsh and demanding environments typically including military, aerospace and industrial uses, and anticipated to be valued at c.US$6.9 billion by 2033.

Stryker holds aerospace industry standard accreditation, which is crucial for Concurrent Technologies to capture the opportunities in the systems market. Stryker operates a plant in Wichita, Kansas, where it produces components and assemblies for aircraft and defence systems.

To finance the acquisition, Concurrent Technologies has also announced that it has raised £6.5 million by placing 10 million new ordinary shares at an issue price of 65 pence per share with new and existing institutional investors. In addition, there will be a separate retail offer to existing investors via the Bookbuild platform to raise up to £0.3 million at the same issue price.

The fundraising is conditional on shareholder approval of certain resolutions to be proposed at a general meeting of the company to be held on 4 September 2023. Cenkos Securities plc is acting as nominated adviser and sole broker in connection with the placing and as retail offer coordinator in relation to the retail offer.

As part of the acquisition, the sellers of Stryker will receive initial cash consideration of approximately US$1.875 million (approx. £1.47 million) and US$1.5 million (approx. £1.17 million) by the issue of 1,807,686 new ordinary shares at the issue price on completion. In addition, certain individuals in the existing Stryker business will be awarded Concurrent Technologies share options under the existing company LTIP.

The acquisition is expected to close between Q4 2023 and Q1 2024.