LONDON: Petards Group plc (AIM: PEG), the AIM quoted developer of advanced security and surveillance systems, has today conditionally agreed to acquire Affini Technology Group Limited (ATGL) and thereby indirectly its wholly owned subsidiary, Affini Technology Limited.

Affini is a UK based critical communications solutions provider to the transport, blue light, energy, defence and construction sectors.

Petards Group has agreed to acquire the entire issued share capital of ATGL from Philip Williams, Peter Burridge, Ian Carr, Michael Norfield and Andrew Woodhall.

The acquisition is only conditional upon the release of certain bank security given by ATGL and Affini. If such release is not obtained by 27 June 2024 (or such later date as Petards and the Sellers shall agree in writing) then the acquisition will not proceed to completion.

The total consideration of the acquisition will be approximately £2.8 million comprising a payment for adjusted net assets of £1.5 million, and a payment for goodwill of £1.3 million.

The sellers have each undertaken to the company and WH Ireland Limited not to dispose of their Consideration Shares prior to the date falling 30 days following the release of the announcement of the Company’s preliminary results for the year ending 31 December 2024, and furthermore have agreed to customary orderly market restrictions in respect of the Consideration Shares thereafter.

Petards has a clear and established strategy to grow both organically by exploiting the synergies within the Group and by acquisition. The Board believes that the acquisition of Affini, a profitable and cash generative business, represents a further step in building the Group’s target markets, adds new capabilities and services to its product portfolio, provides a strong recurring revenue stream, and has a clear fit with the Group’s strategy.

The Directors believe Affini is a highly complementary business and will be a good cultural fit with the existing Group. It has an experienced executive leadership team, who are remaining with the business with strong engineering expertise, consistent business values and principles, an aligned commercial approach and comparable operational procedures. The Directors believe that these factors will help reduce integration risk.

Affini is a UK based critical communications solutions provider to the transport, blue light, energy defence and construction sectors. Affini’s expertise covers the entire life cycle, enabling it to offer an end-to-end service from strategy and design to maintenance and service management.

Affini delivers voice, video and data communication solutions alongside telematics, telemetry and asset/people tracking services. Its revenue is principally derived from project work, consultancy, maintenance and managed services, the latter generating recurring revenues and embedding customer relationships. Affini supplies services to a number of blue chip clients, with many customer relationships spanning 10 years or more.

The Affini business originates from 1974 when the radio division of the organisation that formed British Airways was carved out as a separate business. Historically, Affini’s core capability was the design, deployment and ongoing maintenance of critical communications networks within the aviation sector.  The foundation of these solutions focused on radio technologies, for both landside and airside Private Mobile Radio (PMR) networks as well as ground to air communications within airports.

Following a strategic decision in 2019, Affini has targeted new markets where its skillset can be deployed and where high barriers to entry and operation exist and it has subsequently entered new sectors including in 2019 – blue light (fire and rescue), in 2020 – construction and nuclear and in 2021 – defence.

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