LONDON, UK: Dewhurst Group plc (AIM: DWHT), a UK-based manufacturer of electrical components and systems, has announced that it will acquire the remaining 25 per cent stake in P&R Liftcars Pty Ltd, an Australian lift car interior manufacturer, for a cash consideration of A$2.9 million (£1.5 million).
The deal, which is expected to be immediately earnings enhancing for Dewhurst, follows the exercise of a put option by Roy Peat, the seller and a director of P&R Liftcars, who will stay with the business until September 2024.
Dewhurst had previously acquired 75 per cent of P&R Liftcars in February 2017 for A$1.54 million plus a cash adjustment. Since then, P&R Liftcars has delivered value to Dewhurst shareholders with an initial payback period of 3.5 years and an internal rate of return of 41 per cent.
P&R Liftcars, whose core business is the design, manufacture and installation of new interior lift finishes and full-depth door frame cladding, reported a profit after tax of A$163k (£84k) and net assets of A$5.7 million (£3.0 million) for the year ended 30 September 2023. As at 31 January 2024, P&R Liftcars’ contracted and forward orders comprised A$4.0 million.
The put option, which was amended in March 2020 to be based on 2.5x the average of P&R Liftcars’ best three financial years EBIT, constituted a related party transaction under the AIM Rules for Companies, as the seller was a director of P&R Liftcars, a subsidiary of Dewhurst. Singer Capital Markets, Dewhurst’s Nominated Adviser, was unable to retrospectively consult with the directors of Dewhurst on the fairness and reasonableness of the transaction.