Guildford-based discoverIE Group acquires Silver Telecom

discoverIE Group, the Guildford-based electronics group, has acquired South Wales-based Silver Telecom for an initial cash consideration of £21 million in a deal, it says, which will immediately be accretive to the former's underlying earnings and operating margins.

Silvertell sells its products in over 70 countries and saw revenues of £13.5 million and pre-tax profit of £4.4 million in its year to February 28, 2023.

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Group CEO of discoverIE Nick Jefferies said: "The acquisition of Silvertel continues our strategy of building a differentiated, international, growth focused electronics group with strong operating margins.

"The transaction brings another high quality business with strong alignment to our target markets into discoverIE, which is accretive to both underlying earnings and margins.

"Silvertel has an excellent product range that is highly complementary to our existing group and will gain access to our wider range of industrial connectivity target customers. We are looking forward to welcoming the Silvertel team to the discoverIE Group."

Silvertel, founded in 1997, will become part of discoverIE'S Magnetics & Controls division and will retain its brand identity.

The initial cash consideration of £21 million for the purchase will be on a debt free, cash free basis, before expenses, to be funded from discoverIE's existing debt facilities.

In addition, an earn-out of up to £23 million will be payable subject to Silvertel's performance over the next four years, the company said.

Completion of the acquisition is subject to approval under the UK National Security & Investment Act, expected to be received later this quarter.

FTSE 250 company discoverIE Group provides application-specific components to original equipment manufacturers (OEMs) internationally through its two divisions - Magnetics & Controls, and Sensing & Connectivity.