August 21 (Renewables Now) - UK subsea cable protection systems supplier Tekmar Group Plc (LON:TGP) said today it has signed a deal to buy sector player Subsea Innovation Ltd for a maximum consideration of GBP 4 million (USD 5.1m/EUR 4.5m).
Darlington-based Subsea Innovation manufactures and supplies large equipment handling systems, pipeline repair clamps, and equipment for the construction of offshore oil and gas projects. Even though the business has so far been solely focused on the offshore oil and gas industry, its acquisition will give Tekmar access to a blue-chip global client base that will open up new sales opportunities in the offshore wind sector.
Alasdair MacDonald, non-executive chairman of Tekmar, commented that the group continues to work on improving its position in the offshore wind market. “The proposed acquisition of Subsea Innovation will bring new capabilities, new markets and strong cross-selling opportunities to the group,” he stated.
For Subsea Innovation, the transaction is seen to provide new sales and supply chain opportunities. The firm booked a GBP-1.3-million loss in 2017 on a turnover of GBP 2 million. Its year-to-date turnover for 2018 amounts to GBP 4 million, with a GBP-0.3-million profit, according to management accounts.
Tekmar plans to use Subsea Innovation’s existing manufacturing and office facility as its new headquarters, and there is additional land for future expansion.
The recently-listed company will acquire Subsea Innovation from founder Gary Ritchie-Bland, who is the father of Tekmar Group CEO James Ritchie-Bland. The maximum price that could be paid includes an initial sum of GBP 2 million in cash and GBP 1 million worth of new ordinary shares in Tekmar. An earn-out consideration of GBP 1 million in cash could be provided based on the business’ performance.
The transaction is awaiting shareholder clearance.
(GBP 1.0 = USD 1.282/EUR 1.113)