AIM-listed materials company Versarien bought AAC Cyroma, a specialist plastic manufacturer, for about £1.4m to make the first dedicated graphene plastic manufacturing factory in the world.
Using Versarien's graphene manufacturing capabilities and AAC Cyroma's knowledge, plant and equipment, the acquisition will enable the company to produce graphene enhanced products for its customers, including automotive original equipment manufacturers.
The acquisition, which is the company's largest since floating in June 2013, will be paid in £1.395m of cash and about £264,000 in debt and £266,000 in Versarien shares at 10p each.
An additional £200,000 will be paid if AAC Cyroma achieves pre-tax profit targets for the years ending 31 December 2017 and 2018.
Versarien also bought The Breakfast Club 2000, a non-trading holding company which owns 85% AAC Cyroma’s shares and the remaining 15% was bought from an individual, and together the shares will be admitted to AIM on 7 October.
Versarien chief executive Neill Ricketts, said: "The acquisition is transformational for Versarien, adding a profitable business to the group and importantly one that has considerable synergies with our current activities.
“It provides a dedicated facility from which to manufacture graphene enhanced plastics on an industrial scale. With an established customer base, AAC Cyroma brings a wealth of knowledge of the plastics market together with existing infrastructure, making the combined operation the first graphene enhanced plastic producing factory in existence."
In the year to 31 December 2015, AAC Cyroma made sales of £4.27m with a pre-tax profit of £166,000 and earnings before interest, tax, depreciation and amortisation (EBITDA) of £375,000, while net assets were £883,000.