CHG Chemring Group Plc

    RNS Number : 2468V
  Chemring Group PLC
  27 May 2008
   

    FOR IMMEDIATE RELEASE                                                                                                                   
                                                           27 MAY 2008


    CHEMRING GROUP PLC

    ACQUISITION OF SCOT, INC.


    Chemring Group PLC ("Chemring" or the "Group") announces that it has conditionally agreed to acquire the entire issued stock capital of
Scot, Inc. ("Scot") from SMS Industries, Inc. (a private equity owner) for a cash consideration of US$40 million (£20.2 million), with a
working capital adjustment at completion.

    Description of the business and reasons for the acquisition 
    Scot, based in Downers Grove, Illinois, USA, is a leading manufacturer of cartridge-actuated and propellant-actuated devices (CAD/PADs)
used in aircraft emergency systems and for aircrew egress. Scot also designs and manufactures actuators, valves and sequencers, separation
nuts and bolts, and aircraft weapon ejector systems. 
       
    In the year ended 31 December 2007, Scot reported an audited profit before tax (before non-recurring private equity interest costs of
$2.7 million (£1.36 million)) of $4.7 million (£2.37 million) on revenue of $23.8 million (£12.0 million). Gross assets as at that date
were $9.7 million (£4.9 million). The acquisition is expected to enhance Chemring's earnings in the first full financial year
post-completion.*

    The acquisition of Scot provides Chemring with an important US centre-of-excellence for the design, development, qualification and
manufacture of pyrotechnic devices and sub-systems used in aircraft, missile and space platforms. Furthermore, Scot's engineering capability
complements the existing high volume manufacturing and automation skills within Chemring North America, and should significantly enhance the
Group's position in the US pyrotechnic market. Scot also adds key customer relationships that will enhance the routes-to-market for
Chemring's full range of CAD/PAD products, including rocket motors, pyrotechnic transmission cords, canopy cutting charges and actuators.  


    Principal terms of the acquisition  
    The consideration of $40 million (£20.2 million) will be funded utilising existing bank facilities. 

    Completion is conditional upon, inter alia, the expiry of the thirty day waiting period imposed by an Exon-Florio filing in the US.


    Commenting on the acquisition, David Price, Chief Executive of Chemring, said:

    "The acquisition of Scot significantly enhances our engineering and design skills within the CAD/PAD and pyrotechnic market. The
complementary products and the combined capabilities of Scot and our existing subsidiary, Technical Ordnance, Inc., will create a world
class company that will quickly become the leading supplier of pyrotechnics to the US aerospace market."  



    * This statement should not be taken to mean that the earnings per share of Chemring will necessarily match or exceed the historical
reported earnings per share of Chemring and no forecast is intended or implied.


    For further information:

    Dr David Price        Chief Executive, Chemring Group PLC              01489 881880
    Paul Rayner             Finance Director, Chemring Group PLC            01489 881880
    Rupert Pittman        Cardew Group                                                  0207 930 0777

This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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