Quadramatic, headed by Tony Garland and Jeff Whalley - who together built up the electrical engineer FKI in the 1980s - will raise pounds 10.25m via a placing. The balance of the deal will come through the issue of 689,000 new shares to the vendor.
James Barker, executive director, said Quota would help Quadramatic to become a specialised engineering group, achieving high profit margins. '(Quota) is an attractive business in a growth sector. Around 40 per cent of all industrial processes involve heat, which needs monitoring,' he said.
At the time of the float, Quadramatic's board said it wanted to achieve profits growth of 40 to 50 per cent a year and earnings growth of 20 per cent. Before the acquisition, Quadramatic's estimated pro forma pre-tax profits were pounds 4.59m in the year to 30 September, on earnings per share of at least 9.2p.
Mr Barker said they had bought a debt- free business that would be 'earnings- enhancing from year one.'
Quota made operating profits of pounds 1.56m in the year to 30 June. Most of its pounds 284,000 head office costs will cease after the acquisition. It joins two existing businesses - Coin and Coil. The first makes components for coin-operated amusement and vending machines; Coil makes magnifying lenses and special plastics.
Quadramatic's debt of pounds 21.7m was wiped out by the pounds 20m raised in the flotation. It has net cash of between pounds 1m and pounds 2m and net assets worth pounds 5.5m. The shares closed up 7p at 156p, matching the best price. They floated at 123p.Reuse content