Flowtech Fluidpower – 176.75p

14 March 2018 – acquisition and placing

The company has announced the acquisition of Balu and its trading subsidiaries, Beaumanor and Derek Lane, for a total consideration of approximately £10.2m.  Beaumanor was founded in 1974 and is an importer and distributor of fluid power equipment in the UK.  Derek Lane was founded in 1979 and is a supplier of fluid power products and engineered solutions.  Unaudited financial statements of Balu for the year to 31 January 2018 showed revenue of £11.4m and proforma EBIT of £1.4m.  Unaudited net assets excluding net debt as at the end of January were £5.9m.  A related placing will see Flowtech raise up to £11.0m at a price of 170p per share.  We see this as a positive development and rate the shares as a BUY.

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