Sepura Proposed Acquisition of Teltronic

Sepura Proposed Acquisition of Teltronic

Source: RNS

Sepura plc, the Cambridge based  leading global provider of critical communications solutions, has announced that it has entered into a conditional agreement to acquire the entire issued share capital of Teltronic, S.A.U. (“Teltronic”) for EUR127.5 million.


— Reinforces the Group’s position as a leading global provider of critical communications solutions, strengthening its position in Latin America and the US.

— Immediately enhancing Adjusted Fully Diluted EPS and significantly enhancing it in the first full year after Completion.

— Increased scale enabling the Group to deliver larger projects and provide further improved visibility of earnings.

— Continued diversification of revenues into commercial markets with the addition of significant transportation revenue streams.

— Enhances product offering and technical breadth as the analogue to digital migration accelerates.

About Teltronic

Teltronic provides complete wireless voice and data communications solutions, including infrastructure, terminals and software, principally for customers in the public safety, transportation and utility sectors. Its business covers the entire Professional Mobile Radio (“PMR”) value chain, including network infrastructure, terminals and command and control centres. The company operates in over 50 countries serving customers based primarily in Latin America, North America and the EMEA region.

About the Acquisition and the Capital Raising

Sepura has agreed to acquire the entire issued share capital of Teltronic for EUR127.5 million, to be financed by the partial draw down under its new debt facilities of EUR120 million and the net proceeds of a fully underwritten Firm Placing of 37,389,203 New Ordinary Shares at 130 pence per New Ordinary Share and Placing and Open Offer of 9,149,258 New Ordinary Shares at 130 pence per New Ordinary Share to raise GBP56.9 million, net of expenses . The net proceeds from the Capital Raising will be used to fund the Acquisition and pay the costs and expenses associated with the Capital Raising and Acquisition.

Teltronic generated revenue of EUR62.9 million and adjusted operating profit of EUR8.4 million for the year ended 31 December 2014, giving a 13.4% adjusted operating profit margin. This represented 29.7% and 59.7% year-on-year growth for revenue and adjusted operating profit respectively over the year ended 31 December 2013. Juan Ferro, currently CEO of Teltronic, will lead the enlarged systems and network business of Sepura, along with his senior team.

Gordon Watling, Chief Executive Officer of Sepura, said:

“This is a highly complementary and transformational acquisition which will be immediately earnings enhancing. It brings together two of the market’s growing players, to create a market leading digital Professional Mobile Radio company, with a broader offering and significantly enhanced capabilities.

Teltronic’s business will diversify our geographical reach, growing our footprint in Latin America and enhancing our existing presence in North America, specifically the US; expanding and diversifying our revenue streams accordingly.

As the number and scale of digital radio networks around the world increases, we will have the breadth of portfolio and financial strength to compete for significant new contracts at a high level.”