Fri 1 Feb 2019 07:53 by ukcitymedia.co.uk about : mergers & aquisitions - 0 Comments - 1033 words
Midwich, a specialist audio visual ("AV") distributor to the trade market with operations across the UK and Ireland, Continental Europe and Asia-Pacific, is pleased to announce it has entered into a binding agreement to acquire 80% of the share capital of Prase Engineering S.p.A ("Prase" or "the Company"), an Italian value-added distributor of AV products .
Based near Venice, the Company was founded in 1993 by Alberto and Ennio Prase, both of whom will continue to run the business, with Ennio as managing director and Alberto as sales director. Both will remain on the Board of Directors of Prase.
Prase is a specialist audio and visual distributor with a strong heritage in the solution driven professional audio market where the business operates with high-end specialist brands, such as Shure and Biamp. More recently, the Company has successfully added key video brands Epson and LG to its portfolio.
The acquisition of Prase marks Midwich's entry into Italy, a territory the Group has identified as important in its international expansion. The acquisition is further delivery of the Group's strategy to grow operations through a combination of organic development and selective acquisitions.
In the year ended 31 December 2017, the Company generated revenues of approximately €20.4 million and profit before tax of €2.2 million. Net assets were €10.9 million.
Stephen Fenby, the Midwich Group Managing Director, commented:
"We are delighted to welcome Ennio, Alberto and the Prase team to the Midwich Group. The Company has a very strong reputation, not only in Italy, but also in the European AV market as a whole. As the market leading professional audio distributor in Italy, Prase has an excellent portfolio of vendor partners and a broad customer base which it services with an extensive range of value add support. This acquisition adds to the Group's already formidable capability in the European professional and installation audio sectors. We believe that with the acquisition of Prase, Midwich now has a presence in countries representing over 80% of the European AV market"
Ennio Prase, Managing Director of Prase commented:
"When we were approached by the Midwich team, we quickly saw the benefits of being a part of the Group, and were particularly excited about joining a business with a focus on specialist, value-add distribution. Using the expertise and resources of Midwich, this new relationship will allow us to further accelerate Prase's growth. Alberto and I are delighted to be joining the Midwich Group and are very much looking forward to working with our new colleagues."
Details of the Transaction
The purchase price comprises an initial cash consideration of €7 million (approximately £6.1 million) followed by four fixed payments of an aggregate of €6.4 million (approximately £5.6 million) over the next two years. The acquisition is expected to be earnings enhancing in the first full year.
The consideration for the acquisition will be made from the Group's existing bank facilities.
Options are in place whereby the Group can purchase the remaining 20% of the Company in three years' time or later, based on the financial performance of the Company.
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