FKI men in engineering venture

THE masterminds of FKI's transformation in the 1980s from minor electrical engineer to pounds 600m conglomerate are bringing another engineering company to the market via a placing and offer to intermediaries that values it at pounds 36.4m, writes Topaz Amoore.

Tony Gartland, who stepped down as FKI's chairman in 1991, is the chairman of Quadramatic. Jeff Whalley, FKI's chairman, and James Barker, former finance director, are also on the new company's board.

They aim to build a specialist engineering group, with products that achieve above-average gross margins. The City has been warned to expect calls to help fund acquisitions.

'We will steal a march, because public companies are still repairing balance sheets after the recession,' Mr Gartland said. 'We are debt-free and have proven experience in acquisitions and building companies.'

At 123p per share, the placing of 55 per cent of the enlarged share capital raises pounds 20m to repay debt. The offer price is 13.5 times pro-forma earnings of 9.1p for the year to 30 September 1993. Profits for the year should be not less than pounds 4.5m.

Quadramatic has two existing businesses. The first, Coin, designs and makes coin-handling equipment used in fruit machines, pay telephones and photo booths. Its net margins have doubled since Richard Williams became chief executive in 1991. The second, Coil, designs and manufactures high-precision plastic optical products, such as lenses and magnifiers.