Fairey buys rival in Europe for £166m

Fairey Group, a manufacturer of electronic instruments, yesterday announced the £166m acquisition of a European rival, and a rights issue to partially fund the purchase.

The company bought Spectris, which has operations in Denmark, Sweden and Germany, for £126m for the equity and the assumption of £40.4m of debt. The seller was German conglomerate AGIV, which is being liquidated.

Fairey makes instruments that measure and monitor manufacturing processes.

Sue Cox, an analyst at ABN Amro, said: "This looks a very sensible buy. They're buying a mirror image of themselves on the Continent."

John Poulter, Fairey's chief executive, said: "This produces a much better geographical balance. Our capacity for further acquisitions will now be very limited though."

The purchase will take Fairey's sales from around £300m a year to £520m and will almost double the size of its 3,000 workforce. Spectris made an operating profit of £15.1m last year, on turnover of £200m.

Fairey will issue 16 million new shares at 365p a share, in a 1 for 6 rights issue, to raise £54.4m. The money will be used to partly pay for the acquisition. The rest of the purchase price will come from debt funding.

The company's shares jumped 48.5p to close at 487.5p.