Carclo PLC Acquires Precision Tool & Molding, LLC for up to US$6.5 million

15 October 2016

Carclo announces that its US subsidiary, CTP Carrera Inc., has acquired Precision Tool & Molding, LLC, trading as Precision Tool & Die ("PTD"), for an initial consideration of $5.5 million (approximately £4.5 million) in cash (the "Completion Consideration") plus further deferred consideration of up to $1.0 million (approximately £0.8 million) in cash, subject to the satisfaction of certain performance criteria (the "Deferred Consideration") (the "Acquisition"). The Completion Consideration is subject to a working capital adjustment of up to US$750,000 (approximately £615,000) (the "Working Capital Adjustment"), of which, an initial payment of $256,397 (approximately £210,000) was paid upon completion of the Acquisition. The total Working Capital Adjustment will be determined subsequent to the completion of the Acquisition.

PTD provides high precision mould tooling, injection moulding and assembly for the medical device industry. PTD is based close to Boston, in Derry, New Hampshire in the US.

PTD has very strong technical relationships with several major medical OEMs including three of the global Top 20 medical device manufacturers, none of which are existing customers of Carclo. Approximately 90% of PTD's business is for the medical device industry.

For the year ended 31 December 2015, PTD reported unaudited turnover of US$6.9 million (approximately £5.7 million), unaudited profit before tax of US$1.6 million (approximately £1.3 million) and unaudited net assets of US$2.2 million (approximately £1.8 million). For the year ended 31 December 2015, approximately 60% of PTD's turnover related to injection moulding services and approximately 40% of turnover related to technical and prototyping services, including tooling.

The Board of Carclo believes the Acquisition will enhance the ability of the Group to grow its US operations by extending its global offering to PTD's existing customers and, in parallel, extending PTD's technical prototyping capabilities to the Group's existing customers.

The Completion Consideration has been fully funded utilising a short-term debt facility. The intention is that this facility will be repaid using the proceeds of the proposed placing announced today.


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