Machine tools manufacturer 600 Group has taken a 26.3% stake in ProPhotonix Ltd, the Aim-quoted manufacturer of laser modules and LED illumination systems.
600 Group issued shares valued at £1.1m, at a share price of 22.4p, to pay for the ProPhotonix stake, which was valued at more than double the then share price. The 600 Group share price subsequently fell 1.38p to 21p.
New Hampshire-based ProPhotonix shares are trading at 2.38p a share Ė a new 12 month high. The previous shareholders may have been losing patience with the company. ProPhotonix joined AIM just before Christmas 2010, when it raised £825,000 from a placing at 20p per share. It also converted $1.4 million of debt into shares at the placing price, which valued the business at £10.5 million.
The shareholdings of Legal & General, BlackRock and Hargreave Hale come to just below the total stake acquired by 600 Group but there have been no announcements about who has sold shares.
ProPhotonix has an LED plant in Cork and a laser module/diode factory in Essex, near to 600 Groupís Electrox laser marking business. There could be ways of working together that could benefit both companies. A takeover bid is unlikely in the short-term.
ProPhotonix has consistently lost money since it joined Aim but it hopes to break even this year. Revenues were $15.6m in 2013.
600 Group is forecast to make earnings per share of 2.1p a share this year although the latest share issue is likely to dilute that figure to 2p a share.
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