Home Kent Business County News Article
Consumer electronics firm Armour Group is to sell its automotive division to AAMP of America in a deal worth nearly £11m.
Set to be paid on a cash free debt free basis, the sum is 7.3 times what the division made before interest and tax for the year ending August 31 last year.
The move will generate a profit of about £3m for the Tunbridge Wells-based firm.
After paying costs, the rest of the money will be used to repay the group’s outstanding net debt, which stood at £7.6m in August.
With £3m in the bank, the company wants to organically develop the operations of its remaining divisions Armour Home and Armour Asia.
The £10.9m sale is conditional upon shareholder approval, scheduled for March 28.
Chief executive George Dexter said: “We are pleased to announce the proposed disposal of Armour Automotive to AAMP of America on terms that we believe represents good value to our shareholders.
“The group’s balance sheet will be substantially strengthened with a net debt position of over £7 million becoming a net cash position of approximately £3 million as a result of the disposal.
“Looking forward, the management focus will be on progressing the recovery in Armour Home, continuing to build our business in Asia and looking for new opportunities to further expand the group.
“The board recommends that all shareholders vote in favour of the disposal.”
The move is the latest positive step for Armour, which announced in December it had returned to profit of £600,000 after posting a loss of £1.2m in 2012.
The £1.8m turnaround was more remarkable considering the company reported a dip in turnover to £32.1m, down from £34.4m the year before.
Click here for more news from Kent Business.
Click here for more news from around the county.