TIDMABDP
RNS Number : 7973K
AB Dynamics PLC
02 September 2019
For immediate release
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF
THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
2(nd) September 2019
AB Dynamics plc
("AB Dynamics", the "Company" or the "Group")
Acquisition of Dynamic Research Incorporated
AB Dynamics (AIM: ABDP), the designer, manufacturer and supplier
of advanced testing systems and measurement products to the global
automotive sector, is pleased to announce that it has completed the
acquisition of California based Dynamic Research Incorporated
("DRI") for a maximum consideration of up to $24.7 million (the
"Acquisition").
DRI is a leading supplier of automotive engineering products and
services to the US automotive market with long standing customer
relationships. DRI has expertise in performing full-scale track
testing of Advanced Driver Assistance Systems ("ADAS") and vehicle
dynamics tests, providing these services through a dedicated test
facility and track near Bakersfield, California. Other services
provided include applied research, human factors and simulation.
DRI and its wholly owned subsidiary DRI Advanced Test Systems Inc.
("DRI-ATS") also design and manufacture a range of products for use
in track based ADAS testing.
Rationale for the Acquisition
The Acquisition supports a number of the Group's stated
strategic priorities including:
-- Expanding the Company's international footprint by providing
a sales and engineering facility in a strategically important
territory close to both automotive OEMs and autonomous vehicle
developers;
-- Developing the Group's capabilities by acquiring the ability
to conduct ADAS testing services utilising a
test track facility with a favourable climate for year-round
testing, capacity for growth and the
capabilities of a strong, focussed engineering and product development team;
-- Additional resources in the US to support our growing
installed base of products and provide ongoing services and support
to existing and new customers;
-- Enhancing the Group's capabilities for organic growth by
providing complementary experience in the development and use of
driving simulator technology; and
-- Securing commercially beneficial intellectual property in the
field of ADAS testing products currently
used by AB Dynamics.
Financial Considerations
The Acquisition has been completed on a cash free, debt free
basis for an initial cash consideration, provided from the
Company's existing resources, of $21.0 million with a conditional
cash payment of up to $3.5 million subject to certain performance
criteria being achieved for the year ending 31 May 2020. A further
payment of up to a maximum of $0.2 million may be made subject to
determination of the final closing Net Assets. The sellers will
leave sufficient cash in the business to support the anticipated
initial working capital requirements and have provided warranties
and indemnities appropriate to a transaction of this nature.
Based on unaudited accounts, in the year ended 31 May 2019 DRI
generated sales revenue of approximately $13.7 million (2018: $10.4
million) and normalised operating profit of $3.7 million (2018:
$1.6 million) and they are currently trading in line with
management's expectations. Net assets at 31 May 2019 were $6.8
million.
About DRI
DRI was founded in 1979 and has 45 staff, the majority of which
are professional engineers. It is headquartered in Torrance,
California and wholly owns the products focussed subsidiary
DRI-ATS, which was founded in 2016. DRI operates a test track
facility based near Bakersfield and two driving simulators located
in Torrance. DRI has long standing customer relationships with
automotive OEMs and government agencies and is a supplier to AB
Dynamics in the field of ADAS products and technology.
Prior to acquisition, DRI was privately owned by the DRI
Employee Stock Ownership Plan and the senior management team will
remain with the business in their current roles. DRI will continue
to operate as a stand-alone business with independent management
with oversight and support provided from the Group.
Dr James Routh, CEO, said:
"The Acquisition supports our strategy to complement long term,
sustainable organic growth with attractive acquisitions. This
strategy is disciplined and highly targeted against defined
strategic, operational, financial and cultural criteria and DRI
clearly meets those criteria. DRI has an outstanding reputation in
the field of ADAS testing product technology and is a business that
AB Dynamics has known, worked with and respected for many years,
significantly de-risking the process.
We believe the transaction will not only increase the Group's
access in the growing US market for ADAS and autonomous vehicle
testing and verification, but also complements our technical
capabilities and facilities. Together we will be unrivalled in ADAS
track testing products and well positioned for future growth in an
evolving landscape.
We expect the Acquisition will be earnings enhancing in the
first year following acquisition and we are pleased to welcome the
DRI team to the Group."
Enquires:
AB Dynamics plc 01225 860 200
Tony Best, Non-Executive Chairman
Dr James Routh, Chief Executive Officer
Mat Hubbard, Chief Technology Officer
Cantor Fitzgerald Europe (Broker) 0207 894 7000
Phil Davies, David Foreman (Corporate Finance)
Caspar Shand Kydd, Keith Dowsing, Arthur
Gordon (Equity Sales)
Cairn Financial Advisers (Nomad) 0207 213 0880
Tony Rawlinson
Liam Murray
Richard Nash
Tulchan Communications 0207 353 4200
James Macey White
Matt Low
Deborah Roney
The person responsible for arranging the release of this
information is Dr James Routh, CEO of the Company.
About AB Dynamics plc
AB Dynamics is a leading designer, manufacturer and provider of
advanced products for testing and verification of Advanced Driver
Assistance Systems ("ADAS") technology, autonomous vehicle
development and vehicle dynamics to the global automotive research
and development sector.
The Group is headquartered in Bradford-on-Avon, UK, employing
approximately 260 staff globally. AB Dynamics currently supplies
all the top automotive manufacturers, Tier 1 suppliers and service
providers, who routinely use the Group's products to test vehicle
safety systems and dynamics.
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London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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