LONDON: Solid State plc (AIM: SOLI), the specialist value-added component supplier and design-in manufacturer of computing, power, and communications products, announced the acquisition of Q-Par Antennas USA LLC for a maximum consideration of up to $2.0m.
Q-Par will join the Systems division of the Group.
Established in 2014, Q-Par is a recognised and highly regarded distribution name in the provision of antenna systems and related technologies primarily for defence and security applications.
The business has an existing loyal client base underpinned by valuable approved supplier status agreements.
For the twelve month period to 30 September 2024, Q-Par generated total revenues of $2.0m, albeit, when adjusted for intercompany (Solid State) sales, third party revenues were $0.4m and profit before tax was $0.2m.
The acquisition will be funded from the Group’s existing cash resources. An initial consideration of $0.5m is payable on completion, in cash, with an additional $0.5m paid in the first week of January 2025.
A further deferred payment of $0.5m will be paid out in cash over a two-year period. Earn-out consideration of a further $0.5 million may be payable subject to exceeding certain growth and performance targets.
Benefits of the Acquisition:
· Q-Par is a long-standing distribution partner of Steatite Antennas in the UK and is a respected and trusted brand in the market.
· The Acquisition gives the Group security of distribution in the US market and approved supplier status for key US defence and security Prime contractors.
· Builds a platform in the US Antenna market & expands Solid State’s US footprint – providing better access to the world’s largest antenna market.
· Aids the potential to establish an “on shore” antenna production capability at our facility in Fountain Valley, California, in the medium term, driving further opportunity growth in products assembled in the USA and providing tariff benefits.
· Strengthens credit status of Q-Par by being part of Solid State Group.
· Route to establish Steatite Antenna brand in US as an OEM manufacturer, sitting behind Q-Par as the distributor.
· Leverage administration synergies as part of Solid State’s US activities.
· Important building block for the Group’s medium term US growth strategy.
Commenting on the Acquisition, Gary Marsh, CEO of Solid State Plc, said: “The acquisition of Q-Par Antennas secures a valuable distribution channel and gives the Group an opportunity to further invest in the medium term growth opportunity in the US markets. As Solid State broadens its footprint and product offering in the US market, locally recognised and accredited sales channels enable scale, particularly into niche markets.”
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