LONDON, UK: Light Science Technologies Holdings plc (AIM: LST), the controlled environment agriculture (CEA) technology and contract electronics manufacturing (CEM) group, announced the acquisition of Tomtech (UK) Limited, a UK leader in the design, manufacture and installation of monitoring and control systems for commercial greenhouses and polytunnels, for a total cash staged consideration of £500,000.
The initial cash outlay, payable immediately, is £75,000, with the remaining payments being staged and deferred over the next 30 months. As at 31 December 2022, Tomtech’s balance sheet included cash in excess of £140,000 and is currently c.£284,000.
Since launching its first products into the CEA market over 35 years ago, Tomtech has established itself as a UK leader in the design, manufacture and installation of monitoring and control systems for commercial greenhouses and polytunnels, helping growers optimise and automate their cultivating environments, resulting in superior crop growth.
Tomtech’s product range incorporates control systems and software, irrigation, lighting, sensors and venting. Its systems can be used across multiple crops in glasshouses and other horticultural environments. Additional long-term recurring revenues are generated via maintenance, servicing, and software contracts.
Tomtech’s business closely complements LSTH’s existing CEA offering and will sit within the Group’s CEA division post-acquisition, further strengthening its standing within the CEA market place.
Tomtech currently has over 160 live customers – including commercial growers in agriculture, horticulture and floriculture segments as well as universities and public authorities. It has traded profitably for the last four years. For the year ended 31 December 2022, Tomtech reported unaudited profits before tax of c.£79,000 on sales of c.£680,000, of which c.£49,000 was recurring revenue. As at 31 December 2022, Tomtech had net assets of c.£145,000, including c.£141,000 in cash.
The addition of Tomtech’s product range will further enhance the Group’s market reach and cross selling capabilities, creating a more holistic offering. By utilising the Group’s digital platforms, the enlarged business will be able to take advantage of growing demand for AI in control systems – supporting precision farming with increased digitisation as growers target more control over crops to sustain and improve yields and profitability.
Rising popularity of the Internet of Things (“IoT”) devices and AI solutions is expected to drive demand with the combined technologies of the enlarged Group, providing a comprehensive product range and set of solutions for growers.
The enlarged technology platform and integrated offering will enable the Group to tailor services for existing and new clients. Over 450 clients have been serviced by Tomtech since the business was incorporated, providing a significant springboard for the Group to target new business opportunities both domestically and globally.
Simon Deacon, Chief Executive Officer of LSTH, commented: “We are delighted to have completed our first acquisition since joining AIM. Tomtech has an excellent team and reputation with its clients and we believe their range of products and technology know-how will further enhance our industry reach and standing.
Bringing Tomtech’s 35 years of experience into the Group’s CEA division enables us to provide an important turnkey solution to our customers, providing the technology they need to control the cost of growing, increasing yields and growing all year round.
Acquiring Tomtech enhances our ability as a group to take our products worldwide, offering a full range of products, which sets us apart from our competitors in this very important time for the CEA market where we are seeing extreme weather patterns worldwide affecting our food security.
“Bringing Tomtech into the Group will further strengthen our position. The team’s added understanding of the requirements of growers in all areas of the Industry from glasshouses and polytunnels to hybrid growing environments in vertical growing, will be a big asset to the enlarged Group. We are looking forward to working with the team to strengthen our CEA division not just in revenue terms, but also the additional support to grow our partnerships around the world and to broaden our reach.”
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