Wed, 02 Oct 2024 | BUSINESS SALE
An electronic components specialist has been acquired by technology manufacturer Solid State in a deal worth an initial £1.4 million. Gateway Electronic Components Limited is a specialist in ferrite and magnetic components and solutions.
The company, which was established in 2000 and is based in Nantwich, Cheshire, has been known to Solsta, Solid State’s Components Division, for many years and will join the division following the acquisition.
Solid State said that Gateway has an annualised run rate revenue of approximately £3 million, pre-tax profits of £200,000 and a net asset value of £1 million. As such, the deal reflects around a 7x multiple of Gateway’s pre-tax profits.
The acquisition, which Solid State expects to enhance its earning and be accretive to Solsta’s gross margin in the first full year, will be funded from Solid State’s existing cash resources.
Solsta Managing Director John Macmichael said: “Gateway broadens our product line within sectors that are already core to our footprint, whilst equally giving Solid State an additional aligned client base for its existing product range. The drive to higher margin own-brand products is further enhanced through the addition of the machined ferrite range of products.”
Solid State said: “In recent years Gateway’s reported results reflect some exceptional performance which benefitted from global component shortages and included some non-recurring revenue. In line with broader industry trends, the business has seen a normalisation in demand in its industrial markets post the shortages.”
Gateway Founder & Managing Director Martin Ford said: "We’ve built an excellent business in Gateway which fits very neatly into the culture of Solid State. Their drive to innovate gives me confidence that our technology will be more widely built into customer solutions. As founder of Gateway, I am pleased for our loyal staff that the next phase of growth for the business will be under the capable stewardship of Solid State.”
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