TIDMLST
RNS Number : 4810L
Light Science Tech. Holdings PLC
06 September 2023
Light Science Technologies Holdings plc
("LSTH", the "Company" or the "Group")
Acquisition of Tomtech
Earnings enhancing and complementary addition, further
strengthening the Group's product range and market reach
Light Science Technologies Holdings plc (AIM: LST), the
controlled environment agriculture ("CEA") technology and contract
electronics manufacturing ("CEM") group, announces the Group
earnings enhancing acquisition of Tomtech (UK) Limited ("Tomtech"),
a UK leader in the design, manufacture and installation of
monitoring and control systems for commercial greenhouses and
polytunnels, for a total cash staged consideration of GBP500,000
(the "Acquisition").
The initial cash outlay, payable immediately, is GBP75,000, with
the remaining payments being staged and deferred over the next 30
months. As at 31 December 2022, Tomtech's balance sheet included
cash in excess of GBP140,000 and is currently c.GBP284,000.
Highlights
-- Addition of new CEA revenue streams to the Group
-- Well-established business which has been operating for over
35 years (initially as a sole trader, before incorporating as a
limited company in 2011)
-- Complementary product range with Artificial Intelligence ("AI") opportunities
-- Growing revenues with a proportion of recurring sales on maintenance contracts
-- Strong commercial and operational synergies with the Group's existing offering
-- Loyal CEA customer base across the UK and Ireland
-- Immediately Group earnings enhancing in the current reporting period
Rationale
Since launching its first products into the CEA market over 35
years ago, Tomtech has established itself as a UK leader in the
design, manufacture and installation of monitoring and control
systems for commercial greenhouses and polytunnels, helping growers
optimise and automate their cultivating environments, resulting in
superior crop growth.
Tomtech's product range incorporates control systems and
software, irrigation, lighting, sensors and venting. Its systems
can be used across multiple crops in glasshouses and other
horticultural environments. Additional long-term recurring revenues
are generated via maintenance, servicing, and software
contracts.
Tomtech's business closely complements LSTH's existing CEA
offering and will sit within the Group's CEA division
post-acquisition, further strengthening its standing within the CEA
market place.
Tomtech currently has over 160 live customers - including
commercial growers in agriculture, horticulture and floriculture
segments as well as universities and public authorities. It has
traded profitably for the last four years. For the year ended 31
December 2022, Tomtech reported unaudited profits before tax of
c.GBP79,000 on sales of c.GBP680,000, of which c.GBP49,000 was
recurring revenue. As at 31 December 2022, Tomtech had net assets
of c.GBP145,000, including c.GBP141,000 in cash.
Increased Opportunity
The addition of Tomtech's product range will further enhance the
Group's market reach and cross selling capabilities, creating a
more holistic offering. By utilising the Group's digital platforms,
the enlarged business will be able to take advantage of growing
demand for AI in control systems - supporting precision farming
with increased digitisation as growers target more control over
crops to sustain and improve yields and profitability.
Rising popularity of the Internet of Things ("IoT") devices and
AI solutions is expected to drive demand with the combined
technologies of the enlarged Group, providing a comprehensive
product range and set of solutions for growers. The enlarged
technology platform and integrated offering will enable the Group
to tailor services for existing and new clients. Over 450 clients
have been serviced by Tomtech since the business was incorporated,
providing a significant springboard for the Group to target new
business opportunities both domestically and globally.
Terms of the Acquisition
LSTH has entered into a share purchase agreement with Susan
Elizabeth Thompson, under which, the Company has agreed to acquire
the entire issued share capital of Tomtech for consideration of
GBP75,000 in cash immediately and a further GBP425,000 in cash of
deferred consideration, which is payable in stages - with equal
payments of GBP75,000 being paid after 6, 12, 18 and 24 months and
a final payment of GBP125,000 being paid after 30 months of
completion of the Acquisition.
The consideration will also include an adjustment (the
"Completion Adjustment"), to reflect Tomtech's final cash balance
on completion, once agreed. If it is below GBP150,000, the seller
shall refund to the Company such amount below that figure, while if
it is above GBP185,000, the Company shall pay to the seller
additional consideration equal to such amount above that figure,
subject to agreed deductions, totalling c.GBP25,000. The Completion
Adjustment is expected to be a maximum of GBP75,000, payable by the
Company to the seller, post-acquisition.
All of the Tomtech employees will continue to be employed by the
Group following the Acquisition and appropriate incentivisation
arrangements are intended to be put in place.
Simon Deacon, Chief Executive Officer of LSTH, commented : "We
are delighted to have completed our first acquisition since joining
AIM. Tomtech has an excellent team and reputation with its clients
and we believe their range of products and technology know-how will
further enhance our industry reach and standing. Bringing Tomtech's
35 years of experience into the Group's CEA division enables us to
provide an important turnkey solution to our customers, providing
the technology they need to control the cost of growing, increasing
yields and growing all year round. Acquiring Tomtech enhances our
ability as a group to take our products worldwide, offering a full
range of products, which sets us apart from our competitors in this
very important time for the CEA market where we are seeing extreme
weather patterns worldwide affecting our food security.
"Bringing Tomtech into the Group will further strengthen our
position. The team's added understanding of the requirements of
growers in all areas of the Industry from glasshouses and
polytunnels to hybrid growing environments in vertical growing,
will be a big asset to the enlarged Group. We are looking forward
to working with the team to strengthen our CEA division not just in
revenue terms, but also the additional support to grow our
partnerships around the world and to broaden our reach."
For additional information please contact:
Light Science Technologies Holdings www.lightsciencetechnologiesholdings.com
plc
Simon Deacon, Chief Executive Officer via Walbrook PR
Jim Snooks, Chief Financial Officer
Andrew Hempsall, Chief Operating
Officer
Strand Hanson Limited (Nominated Tel: +44 (0) 20 7409 3494
& Financial Adviser)
Ritchie Balmer / James Harris /
Rob Patrick
Oberon Capital (Broker)
Mike Seabrook / Nick Lovering Tel: +44 (0) 203 179 5300
Walbrook PR Ltd (Media & Investor Tel: +44 (0)20 7933 8780 or
Relations) lst@walbrookpr.com
Nick Rome / Paul McManus
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as
it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
About Light Science Technologies Holdings plc (
www.lightsciencetechnologiesholdings.com )
Light Science Technologies Holdings plc is the holding company
of the Group's controlled environment agriculture ("CEA") division,
Light Science Technologies Ltd ("Light Science Technologies"), and
its contract electronics manufacturing ("CEM") division, UK
Circuits and Electronics Solutions Limited ("UK Circuits").
Controlled Environment Agriculture
Light Science Technologies was founded in 2019 and is the
Company's grow lights and sensor technology business, providing
bespoke recipes and technologies tailored to customers' needs -
with key targets including indoor, vertical, glasshouses,
polytunnels and medicinal farming markets. The all-in-one CEA
solution will include analysing customers' crop growing
requirements to provide bespoke, low-energy and sustainable
equipment.
Market drivers include food and water shortages in many parts of
the world; growing global population; UK and other government
policy encouraging sustainable and efficient growth methods;
increased scrutiny of the effect of food production on climate
change and the continuing transition away from processed foods.
sensorGROW
sensorGROW was launched in June 2022 and its technology will
enable farmers to monitor the following key air zone growing
factors in real-time: carbon dioxide levels, humidity, light,
oxygen - and in the future: air speed, plant disease, soil,
temperature and water pH levels. By monitoring these key growing
factors, farmers can save money through better management of
resources: water, nutrients, fertilisers and energy - while
increasing yields and producing healthier crops.
nurturGROW
nurturGROW is a sustainable grow lighting product range,
offering an innovative, high-performance and cost-effective
solution for indoor farming, covering greenhouses, vertical
farming, polytunnels and medicinal plants.
Created with four core component parts, the nurturGROW range is
made of high quality, durable materials to give growers the ideal
balance between strength and optimal performance, minimising the
amount of materials needed to drastically cut down on waste and
reduce carbon footprint.
Tomtech
Tomtech was established in 1986 as a sole trader and
incorporated as Tomtech (UK) Limited in 2011. Since then, it has
become a UK leader in control systems for commercial greenhouses
and polytunnels. Since launching its first product over 35 years
ago, it has been at the forefront of the sector, providing
innovative and effective products and solutions.
It now provides comprehensive solutions to customers helping
them create, monitor and maintain an optimised cultivating
environment within glasshouses and other horticultural spaces. Its
sensors monitor temperature, humidity, light, carbon dioxide, pH,
nutrients and more - whilst its intelligent systems help control
irrigation, fertigation, dosing, ventilation, light and more.
Its highly adaptive systems are used throughout the UK and
Ireland to optimise growing conditions for multiple types of crops
grown within commercial greenhouses and other horticultural
environments.
Contract Electronics Manufacturing
UK Circuits is the Company's CEM focussed division, profit
making with strong revenues. The Group designs, procures, and
manufactures high-quality CEM products, specialising in Printed
Circuit Boards, which are used in a range of sectors including
audio, automotive, electronics, gas detection, lighting, pest
control, telecommunications and, more recently, the CEA market.
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