Acquisition of EMC Elite Engineering Services

Amcomri Group plc (AIM: AMCO), the UK focused specialist engineering services and industrial manufacturing group, announces the acquisition of EMC Elite Engineering Services Ltd ("EMC"), a niche mechanical and electrical engineering service provider to the power generation, process and aggregate industries (the "Acquisition").

The initial cash consideration of £2.5m was paid from existing cash resources on completion of the Acquisition, with the remaining balance being a combination of deferred payments and an earn-out agreement, as described in more detail below.

Highlights

• EMC has a strong reputation in the power generation, process, and aggregate industry sectors with a long track record of delivering high-quality maintenance and project based mechanical and electrical services.
• EMC is an established and proven sector specialist with a highly skilled workforce, generating a strong financial performance and positive operating cash flow.
• Highly experienced and competent senior management team with extensive technical knowledge and experience of their chosen market sectors.
• Potential to expand EMC's specialist technical services into adjacent industrial markets, increase geographic reach, and extend services with key customers, providing clear growth opportunities for the business, with further synergy opportunities with other Amcomri companies.
• Demand for EMC supplied maintenance, repair and project services is driven by regulatory requirements, planned maintenance outages, and equipment asset upgrading requirements across critical industries, ensuring recurring revenue and a strong pipeline of opportunities.

Acquisition Rationale

Amcomri has a proven model of acquiring, integrating and enhancing specialist engineering services and industrial manufacturing businesses. EMC is well aligned with the Group's industrial strategy and has built a strong reputation over 10 years in the power generation, process, aggregates and energy sectors, supported by its track record of delivering high-quality maintenance, mechanical and electrical services, evidenced by its growth profile.

Within its chosen market sectors, EMC has built up a diverse customer base consisting of well-established, high-quality businesses in largely stable, regulatory-driven markets, providing both resilience and long-term growth potential, both for EMC and the Group. In particular, the Acquisition brings to the Amcomri Embedded Engineering Division significant large 'rotating equipment' maintenance and overhaul expertise including multi-stage pumps, power generation turbo-alternators, and aggregate milling systems. With additional expertise in low and medium voltage electrical systems, power generators, and more recently renewable energy storage systems, EMC also complements the existing Group's high voltage engineering capabilities in its WJ Project Services business and supports the Group's entry into selected renewable energy technologies.

For the year ending 31 August 2024, EMC generated revenues of £5.7m and profit before tax of £0.9m. As at 31 August 2024, EMC had net assets of £1.6m.

Terms of the Acquisition

Amcomri has entered into a share purchase agreement with Jamie Herbert, Michelle Herbert, David Lewis and Andrea Lewis (the "Sellers") under which the Group has acquired the entire issued share capital of EMC for an initial cash consideration of £2.5m, which was paid from existing cash resources. Deferred consideration of £1.5m is payable in cash in stages - with equal payments of £500,000 being paid 12, 24 and 36 months post completion of the Acquisition. In addition, an earn-out agreement is in place whereby the Sellers will be entitled to 25% of any annual EBITDA achieved above £880,000 in each of the three years post completion. Under this arrangement any payments will be capped at £280,000 per year.

All of EMC's employees will continue to be employed by EMC following the Acquisition.

Hugh Whitcomb, Co-Founder and CEO of Amcomri, commented:

"We are delighted to confirm EMC as our first acquisition since admission to AIM in December last year. We have an ambitious organic and acquisitive growth strategy, and we are very pleased to welcome David Lewis, Jamie Herbert, and all of the EMC team to the Group, as we continue to roll out our proven 'Buy, Improve, Build' model. EMC has an outstanding team and reputation, which we believe will significantly enhance our Embedded Engineering capability and technical service offering going forward, and we very much look forward to working with Dave, Jamie and the EMC team."

"2025 has started well across the Group and I look forward to providing a trading update for the financial year ended 31 December 2024 and the commencement of the current financial year, next month."