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Summary
- SKS Technologies has entered into a binding agreement to acquire APEC Technologies Group’ business.
- After the acquisition, the company estimates to achieve an annualised revenue of up to $50 million.
- SKS Technologies’ share price has skyrocketed by a massive 14.28 per cent to A$0.24 (as at 10:50 AM AEDT).
On 5 March 2021, SKS Technologies Group Limited (ASX:SKS) announced that it entered into a binding agreement with APEC Technologies Group to acquire its assets and ongoing business. The acquisition is estimated to be valued at around $2 million. However, the agreement is subject to satisfactory due diligence. The aim behind the acquisition is to rapidly expand the capacity and capability to capture the emerging opportunities in this sector.
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APEC Technologies Group is a Victoria-based company aiming to provide high-quality fibre networking, communications and electrical solutions nationally to a blue-chip client base. The diverse base of clients includes major banks, telcos, retailers, sporting facilities, healthcare and hospitals, educational institutions, defence and broader government organisations.
After the acquisition, the company estimates to achieve annualised revenue of up to $50 million and will reach a combined work in hand position of more than $20 million. The APEC Technologies Group's acquisition also enables the company to secure a platform to leverage and build a long-term recurring revenue stream from its existing client base. The purchase will be EPS accretive in the first 12 months of combined operations.
The acquisition will be funded through the issue of new equity in SKS Technologies. The ordinary shares will be issued to the vendor at a 20% discount to the 10-day volume-weighted average price (VWAP), ending five days before the completion of the sale. Half of the shares will be held in voluntary escrow for a period of 12 months from completion and the balance for a period of 2 years.
After the completion of the acquisition, which is estimated to be achieved in late March 2021, giving the company a full quarter of revenue before the year-end, the business will be re-branded to SKS Technologies from the first day of combined operations.
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Stock Performance
Image Source: Copyright © 2021 Kalkine Media Pty Ltd.
SKS Technologies’ share price has skyrocketed by a massive 14.28 per cent to A$0.24 (as at 10:50 AM AEDT). In the last three months, the stock has delivered a return of 41.1 per cent.
