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Electronic components supplier Acal (LON:ACL) announced it has bought Contour, a custom cable and connector specialist, for £17mln.
Contour, made up of Contour Holdings and its affiliate Contour Electronics Asia, will more than double the group's revenues in the cable sector, the firm said.
FinnCap said the acquisition is “further evidence of progress in Acal’s strategy of building a differentiated business with higher operating margins.
Acal will pay £14mln in cash, funded from the group's debt facilities, and issue shares for the remaining £3mln.
Contour has grown strongly over recent years, Acal revealed, and the acquisition will be immediately earnings enhancing.
Contour's revenues for the year ended 30 June 2015 were £10.7mln with an underlying pre-tax profit of £1.8mln.
Nick Jefferies, chief executive of Acal, said: “The acquisition of Contour continues our strategy of building a differentiated group with higher operating margins by buying high quality, growing design and manufacturing businesses.”
The firm has now made more than 10 acquisitions since it listed in 2009, and, speaking in November, Jefferies said the firm had £35mln put aside for more deals, with a pipeline of around a dozen opportunities.
Broker finnCap said progress is “being achieved both organically and by acquisition and, supported by the proliferation of technology and clients’ increasing need for Acal’s technology-based services, we believe that Acal is set to generate significant value.”
Shares in Acal climbed 8p to 283p on Friday.