14 March 2018 – acquisition and placing
The company has announced the acquisition of Balu and its trading subsidiaries, Beaumanor and Derek Lane, for a total consideration of approximately £10.2m. Beaumanor was founded in 1974 and is an importer and distributor of fluid power equipment in the UK. Derek Lane was founded in 1979 and is a supplier of fluid power products and engineered solutions. Unaudited financial statements of Balu for the year to 31 January 2018 showed revenue of £11.4m and proforma EBIT of £1.4m. Unaudited net assets excluding net debt as at the end of January were £5.9m. A related placing will see Flowtech raise up to £11.0m at a price of 170p per share. We see this as a positive development and rate the shares as a BUY.