Acquisition and Placing
Corac Group plc, the innovative research and technology group that specialises in high speed compressor and power electronics technology serving the global energy and resources sector, is pleased to announce a proposed acquisition and a placing.
- Conditional agreement to purchase Wellman Hunt Graham and Wellman Defence for a cash consideration of £10.75 million.
- Wellman Defence is a leading global supplier of submarine air purification equipment and clean air ventilation.
- Wellman Hunt Graham is a UK based manufacturer and supplier of shell and tube heat exchangers.
- Acquisition to be funded by a combination of a placing at 10.5 pence per new share to raise approximately £6.35 million before expenses and Corac's existing cash resources.
- Acquisition brings the following strong strategic and financial benefits for the Company:
- Diversifies technology risk and strengthens Corac's IP portfolio;
- Introduces sustainable revenues and contribution, reducing Corac's cash burn;
- Creates an opportunity to leverage Corac's management and resources to further develop the acquired businesses;
- Contributes complementary, engineering design capabilities to Corac;
- Strengthens Corac's presence in the oil and gas markets; and
- Utilises Wellman's technology and manufacturing skill sets and management experience.
- The Group will report its final results for the year ended 31 December 2011 on 17 April 2012.
- Cash and cash equivalents are expected to be £15.3m as at 31 December 2011.