Roxboro increases dividend prediction
Roxboro said the acquisition would significantly enhance earnings and forecast its 1994 dividend at 4.5p compared with the 1.9p predicted in its flotation prospectus in November.
Solartron makes specialist sensors and measurement instruments using technology similar to existing Roxboro businesses. Most of its products are tailor-made for customers such as Rolls-Royce, General Electric Aero Engines and Lucas Industries.
Harry Tee, Roxboro's chief executive, said: 'Solartron operates in niche markets which will give the whole group access to an excellent customer base.' Mr Tee formerly managed all except one of the Solartron businesses before their management buyout from the Schlumberger group in November.
Last year Solartron made profits of pounds 4.8m before tax and interest on sales of pounds 48m. Roxboro's pre-tax profits were pounds 6.4m on turnover of pounds 42m.
Roxboro is paying pounds 26.4m cash for Solartron, with the balance met by the issue of just over six million new shares. It is also taking on Solartron's pounds 12.3m debt.
A further consideration of pounds 10m is subject to Solartron meeting a 12- month profits target. The company's vendors are its management and Schroder Venture Funds, which will increase its shareholding in Roxboro from 16 to 20 per cent.
Roxboro will raise pounds 30.6m through a placing and open offer at 255p. The shares rose 14p to 284p.
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