Spectris and Oxford Instruments merger could create new FTSE 100 company

By Stephen Emerson

28 February 2022

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Oxford Instruments

A proposed merger between high tech engineering giants, Oxford Instruments and Specrtris, would create a market capitalisation within FTSE 100 limits.

The merger would give the new entity a combined market capitalisation close to £4.6m with the lowest entry by market capitalisation in the FTSE 100, steel manufacturer Evraz Plc, currently sitting at early £3m meaning that it could be considered for admittance.

Oxford Instruments announced today that it was considering a cash and share takeover offer from Surrey-based Spectris which would value each share in the Abingdon firm at £31.00.

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Under the proposal, Oxford Instruments shareholders would receive £19.50 in cash plus £11.50 in new Spectris shares for each share that they own.

Specrtris provides high-tech instruments, test equipment and software with Oxford Instruments operating in a similar sphere through its supply of high technology tools and systems for research and industry.

Andrew Heath, Chief Executive of Spectris, said:

"Spectris has been significantly strengthened in recent years through progress against our Strategy for Profitable Growth, delivering a more focused, profitable business supported by a strong balance sheet.

"Our recent financial results demonstrated continued strong organic growth, expanding margins, and a healthy order book. Following a series of successful divestments under this strategy, we have been actively exploring opportunities to re-invest in acquisitions that have a strong strategic, financial and cultural alignment to our business and that will enhance and accelerate our growth opportunities.

"A combination of Spectris and Oxford Instruments would bring together two highly complementary businesses and create a leading global player in precision measurement. Oxford Instruments' highly attractive, differentiated technologies are leaders in their fields and, combined with our own, will deliver a significantly enhanced value proposition for customers.

"The Spectris Board believes that a combination of our businesses will deliver a stronger future for both companies as a UK champion in the high technology instrumentation sector, and create immediate and long-term value for shareholders."

The latest offer from Spectris follows earlier approaches for Oxford Instruments with the last being made earlier this month.

Talks between both parties remain ongoing with Oxford Instruments having a deadline of March 28 to respond to the takeover bid.

By Stephen Emerson

Stephen Emerson is the Managing Editor of The Business Magazine and is responsible for the publication's print publications and online properties including the newly launched Biz News websites in Hampshire and Dorset.

Stephen has been a journalist for 20 years and has worked at local, regional and national publications and led a team which made The Scotsman website one of the fastest growing news sites in the UK with over eight million monthly users.

He has a keen interest in technology, property and corporate finance and telling the stories of the people behind the successful firms in these sectors.