LONDON, UK: LPA Group plc – the high reliability LED lighting, electronic and electro-mechanical system designer and manufacturer – announced the conditional purchase of a product line from Amphenol Limited. The product line is Amphenol’s UK historic range of railway inter-carriage electrical connectors (inter-car jumpers), complementing LPA Connection Systems’ existing product range.
The acquisition, effective 24 March 2023, replaces a ten year licensing agreement between LPA and Amphenol, signed in May 2021, whereby LPA undertook the manufacture and supply of Amphenol connectors to the UK rail aftermarket customer base, and the profits from the product line were shared on a 50:50 basis between the two parties.
The acquisition enables LPA Group to continue to manufacture and supply the railway inter-carriage electrical connectors direct to the customer, and now retaining all associated profits.
Paul Curtis, CEO, commented: “This is an excellent agreement for all parties, assisting both in their strategies of development and growth for the coming years. The aftercare market is a key focus for LPA and these products provide access to nearly 3,000 existing vehicles, to which we can offer our excellent levels of quality and support over the coming decade. This product line will support the Group’s delivery of FY23 results in line with existing Board expectations.”
The acquisition of railway inter-carriage electrical connectors range, now agreed and signed, is conditional on formal approval from our customer. The terms of the Acquisition have been discussed with the customer, no problems are envisaged, and formal approval is expected to be obtained within the coming weeks.
The revenue for this product line for the year ended 30 September 2022 was £388,000, with a total PBT of £115,000 split between the two parties.
LPA Group is acquiring all product line intellectual property and tooling. Consideration paid for the acquisition is £500,000 satisfied in cash from existing cash resources. As at 28 February 2023, LPA Group had cash of approximately £1.6m (unaudited) and bank debt of £2.1m (unaudited).