LONDON: Volex plc (AIM: VLX), the UK-based manufacturer known for complex power and data connectivity solutions, has bought out the remaining 64.3% stake it didn’t already own in Kepler SignalTek Ltd (KST), bringing its ownership of the medical device maker to 100%. The deal was signed and completed on the same day, a statement said.
The Deal at a Glance
Volex is paying up to $89.4 million for the business on a cash-free, debt-free basis. That breaks down into roughly $74.7 million in cash at completion — subject to the usual net debt and working capital adjustments — plus up to $14.7 million in deferred payments spread across two annual tranches, contingent on KST hitting certain revenue targets. Both the upfront and deferred amounts include payouts earmarked for KST employees.
KST isn’t a small bolt-on. In the fiscal year ended March 31, 2026, the company grew revenue organically by 10%, reaching $51.8 million, up from $47.0 million the year before. Volex expects the acquisition to boost earnings immediately and lift its overall operating margin, since KST’s EBIT margin already runs ahead of the group average. Management is targeting a return on capital employed above 15% within two years of closing.
Why KST Matters to Volex
KST specializes in patient-connected medical products — think single-use and reusable cables and devices used in patient monitoring, surgical procedures, cardiac therapy, and ultrasound imaging. Manufacturing runs out of Dongguan, China, and Batam, Indonesia.
This isn’t a new relationship. Volex has backed KST financially since the company was founded in 2017, most recently holding a 35.7% stake before this deal. The acquisition builds directly on Volex’s existing Medical division, which makes complex cable assemblies for equipment like MRI scanners, robotic surgery systems, and diagnostic imaging tools. Where that business sits inside the machine, KST’s products connect the machine to the patient — a natural adjacency with, notably, limited overlap in customer base. Volex is betting it can cross-sell KST’s products into its existing healthcare technology relationships, and vice versa.
The transaction will be funded through Volex’s existing debt facilities. Pro-forma leverage will tick up to roughly 1.1x from 0.8x as of March 31, 2026 — a modest increase that still leaves the balance sheet with room to pursue further deals in its acquisition pipeline.
KST founder Scott Hayden, who started the company in 2017, will stay on to lead the business, with the existing management team expected to remain in place. Until now, KST had been treated as an equity-accounted associate on Volex’s books; going forward, it will be fully consolidated as a subsidiary within the Medical segment.
Leadership’s Take
Volex CEO Nat Rothschild framed the deal as the culmination of a long-standing partnership rather than a cold acquisition. He noted that Volex has supported KST’s growth since Scott Hayden founded the company in 2017, and said the two sides know each other’s business, team, and customers well enough that joining Volex’s global platform is a logical next step.
Rothschild also tied the move to the company’s broader strategy: extending Volex’s reach from the cables inside medical equipment to the products that connect that equipment to patients, with little customer overlap and room to grow together. He pointed back to the medium-term targets Volex laid out at its Capital Markets Day in April 2026 — $2 billion in revenue at a 12% underlying operating margin — as the backdrop for the deal.
The Bigger Picture
The acquisition fits a pattern of consolidation in medical device manufacturing, where suppliers are increasingly looking to control more of the value chain — from internal components to the products that touch the patient directly. For Volex, turning a nine-year minority investment into full ownership also signals confidence in KST’s growth trajectory and a willingness to lean on existing debt capacity to fund it, even as the company keeps an eye on further acquisitions down the line.
