An ambitious distributor of electronic components is set for more growth after snapping up another firm in a £1 million deal.

Advanced Power Components, based on Medway City Estate, Rochester, has confirmed its acquisition of Contech Electronics, a leading distributor of data input devices. The cash deal includes £375,000 for assets and £550,000 for goodwill.

A further payment of up to £75,000 depends on Contech’s pre-tax profit performance during the first three months under APC control.

APC, which is listed on the Alternative Investment Market (AIM), is a specialist distributor and manufacturers’ representative of electronic components.

The firm said that about half a million pounds will be paid on completion, followed by three equal quarterly payments over the following nine months. It added that the acquisition would be earnings enhancing.

Contech has been in business for 20 years and operates in a highly specialised sector of the electronics market. It supplies products such as specialist keyboards, barcode scanners, card readers and touch screens to a range of markets including industrial, broadcast and medical.

Contech, besed in Old Stevenage, Hertfordshire, employs seven staff and generated £1.26 million in the eight months ending March 31. Its pre-tax profits were £154,000.

Mark Robinson, APC chief executive, said: "The acquisition of Contech will allow APC to maintain its strategy of focussing on highly specialised product areas whilst facilitating a degree of diversification into new technologies and markets.

"We expect that APC’s resources will assist in Contech’s development within a number of specialist sectors leading to a further boost to APC’s overall growth."

APC has trebled in size over the past four years and aims to become the UK’s number one specialist component distributor.