LONDON, UK: Volex Plc (AIM: VLX), the specialist integrated manufacturer of critical power and data transmission products, has agreed to acquire the entire issued share capital of Murat Ticaret Kablo Sanayi A.Ş. (Murat Ticaret), a leading manufacturer of complex wire harnesses headquartered in Turkey for a total consideration of up to approximately €178.1 million.

Volex also announced a placing and retail offer to raise gross proceeds of approximately £60 million in aggregate.

The acquisition is in line with Volex’s strategy of organic growth, supplemented by value-enhancing M&A, and represents a significant step in achieving the Group’s stated five-year plan, in particular, broadening the product offering and customer base, expanding the manufacturing footprint, and further diversifies the Group, creating a new, fifth end market.

Murat Ticaret is a highly profitable business with a strong financial track record. In the year ended 31 December 2022, it delivered consolidated revenue and underlying EBITDA of approximately €158 million ($172 million) and €33 million ($37 million) respectively.

Murat Ticaret has generated EBITDA margins of approximately 20 per cent over its last three financial years and is highly cash generative, with cash conversion averaging approximately 80 per cent over the same period

The consideration of up to approximately €178.1 million will be satisfied through €136.5 million in initial cash consideration; and up to €41.6 million of deferred contingent consideration payable over two years subject to certain performance conditions.

Murat Ticaret is a highly complementary business with similar characteristics which fit the Volex model. The acquisition is expected to complete in two to three months, subject to approval by the Turkish and Macedonian competition authorities.

Nat Rothschild, Executive Chairman of Volex Plc, said:  “We’re extremely excited to announce the acquisition of Murat Ticaret, which we believe is an exceptional fit with Volex, and is expected to be highly earnings accretive. Murat Ticaret is a very complementary business, as a high mix, low volume manufacturer, with a strong customer base, and many characteristics which fit well with our business model.

“Over a period of three years, we have been able to get to know the business and management team well, all of whom will transfer to Volex, and we look forward to welcoming our new colleagues to the Group later this year.

“We believe this transaction is truly transformational for Volex, further diversifying our end market and customer exposure by adding a new, fifth growth end market, broadening our product and knowledge offering, whilst structurally improving the profitability of the Group.”

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