LONDON, UK: discoverIE Group plc, a leading international designer and manufacturer of customised electronics to industry, today announced the acquisition of Silver Telecom Limited, a UK-based designer and manufacturer of Power-over-Ethernet modules and complementary products for global industrial electronic connectivity markets.

The deal, which is subject to approval under the UK National Security & Investment Act, involves an initial cash consideration of £21m on a debt free, cash free basis, before expenses, and an earn-out of up to £23m depending on Silvertel’s performance over the next four years.

Silvertel, which was founded in 1997 and is based in Newport in South Wales, sells its products in over 70 countries and will be part of the Magnetics & Controls division of discoverIE. The company will retain its distinct brand identity.

Silvertel delivered an exceptional performance in the year to 28 February 2023, with revenues of £13.5m and pre-tax profit of £4.4m, with gross assets of £4.6m. Performance in the current year is expected to be closer to the 2022 financial year, where the business reported revenues of £8.4m and pre-tax profit of £2.2m.

The acquisition is expected to be immediately accretive to underlying earnings and underlying operating margin of discoverIE. Following completion of the acquisition, the Group’s proforma gearing as at 31 March 2023 increases from 0.7 to 1.0x, leaving capacity for further acquisitions. The pipeline of acquisition opportunities in development remains strong.

Nick Jefferies, Group Chief Executive of discoverIE plc, said: “The acquisition of Silvertel continues our strategy of building a differentiated, international, growth focused electronics group with strong operating margins. The transaction brings another high quality business with strong alignment to our target markets into discoverIE, which is accretive to both underlying earnings and margins.

Silvertel has an excellent product range that is highly complementary to our existing Group and will gain access to our wider range of industrial connectivity target customers. We are looking forward to welcoming the Silvertel team to the discoverIE Group.”

For more information about discoverIE Group plc and Silvertel, please visit their websites at discoverIE and [Silvertel] respectively.

discoverIE Group acquired Magnasphere Corporation for $22 million