Monday, June 24, 2024

Light Science Technologies makes fire protection acquisition

Light Science Technologies Holdings plc, the Derbyshire-based controlled environment agriculture (CEA) technology and contract electronics manufacturing (CEM) group, has entered into an asset purchase agreement (APA) with Fire Barrier International Ltd (FBIL), to acquire its Injecta Fire Barrier trade and assets (IFB).

The APA is structured with the consideration being a deferred profit share agreement, with no initial or fixed outlays and the acquisition is expected to be near term cash generative for the group.

There are a number of synergies with the group’s existing operations – especially within the CEM division, which has long standing relationships within the fire protection market, providing technology and equipment for the fire safety sector for over 10 years.

IFB will also advantage from the additional governance required under the group’s plc umbrella, which is expected to be a strong selling point for potential clients. It will further benefit from the group’s knowledge and knowhow within maintenance and installation operations. 

IFB will be integrated into the company’s newly incorporated subsidiary LSTH IFB Limited.

IFB commenced trading in 2022 and currently owns two pumps, which are capable of generating significant annual revenues. It has completed two projects to date, generating c.£790,000 in sales. It currently has a quoted pipeline of potential sales opportunities worth c.£7 million and a forward order book worth c.£600,000.

FBIL is currently wholly owned by LSTH’s CEO, Simon Deacon. LSTH will acquire IFB from FBIL on a contingent deferred consideration basis, with no initial or guaranteed deferred consideration payments. Total maximum consideration payable is £1.75 million over a five year payout time limit.

Simon Deacon, Chief Executive Officer of LSTH, said: “The Government has called for urgent action to make buildings safe across the UK, and there are over 40,000 buildings in UK which need urgent attention. These include hotels, students’ accommodation, apartments, hospitals, government buildings.

“Fire safety is paramount – the Government has already allocated over £5 billion to replace dangerous cladding – a figure that is expected to increase significantly, with some contractors suggesting that a figure closer to £50 billion would be appropriate. 

“We believe that with our knowledge in the industry and our installation teams across the Group, this new division, in a growing market with high demand, resolves a significant problem quickly and cost effectively – and more importantly keeps people safe.

“The cash-generative nature of the business will be valuable as we grow, and the synergies with existing operations make it a strong fit as part of our managed expansion.

“We are excited by the continued opportunities across the CEM and CEA divisions and, given wider government legislation and need for protective solutions, believe that IFB will be a strong addition that will be self-funding from day one.”

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