Home and in-car entertainment products supplier Armour Group has acquired Sweden-based 12 Volt Sverge for £250,000.
Armour has been conserving cash so the fact it is spending money on acquisitions suggests the business is on a firmer footing. Net debt is £7.1m.
The acquired business supplies in-car entertainment systems to the Swedish vehicle aftermarket and an exclusive two-and-a-half year distribution deal has been signed with Alpine. The business will be integrated with the existing Swedish operations. The acquisition should add £750,000 to revenues and £80,000 to profit in a full year. The deal should be earnings enhancing for this year.
House broker finnCap believes that Armour broke even in the year to August 2013. A profit of £500,000 is forecast for the current financial year, with a nine month contribution from the acquisition, and the business should generate cash.
At 5.63p a share, Armour is valued at £5.5m – equivalent to 14 times prospective earnings.
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