Acquisition of remaining stake in Kepler SignalTek
Volex acquires remaining 64.3% stake in Kepler SignalTek for up to $89.4 million, taking ownership to 100%.
- Total consideration up to $89.4 million
- Initial cash consideration approximately $74.7 million
- Deferred consideration up to $14.7 million
- KST FY2026 revenue $51.8 million
- KST FY2025 revenue $47.0 million
- Expected ROCE within two years exceed 15%
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Medical offering into patient-connected products
Volex plc (AIM: VLX), a critical manufacturing partner to category leaders, delivering complex power and data connectivity solutions, announces that it has acquired the remaining 64.3% of the issued share capital of Kepler SignalTek Ltd ("KST") that it does not already own, taking the Group's ownership of KST to 100% (the "Acquisition"). Signing and completion of the Acquisition occurred today.
Acquisition highlights
| · | KST is a specialist manufacturer of patient-connected medical products and adds an adjacent and complementary product category to Volex's existing Medical business |
| · | Total consideration of up to $89.4 million on a cash free, debt free basis, comprising an initial cash consideration of approximately $74.7 million payable on completion, subject to customary adjustments in respect of net debt and working capital, and deferred cash consideration of up to $14.7 million payable in two tranches on each of the two anniversaries following completion, subject to KST achieving certain revenue targets, with both the initial and deferred consideration tranches inclusive of certain amounts payable to employees of KST |
| · | In the year ended 31 March 2026, KST achieved organic revenue growth of 10%, delivering revenue of $51.8 million (FY2025: $47.0 million) |
| · | The Acquisition is expected to be immediately earnings enhancing, and to improve the Group's underlying operating margin, with KST's EBIT margin ahead of the Group's underlying operating margin |
| · | The return on capital employed from the Acquisition is expected to exceed 15% within two years of completion |
Acquisition Rationale
KST is a specialist manufacturer of patient-connected medical products, including single-use and reusable cables and devices used in patient monitoring, surgical procedures, cardiac therapy and ultrasound imaging. KST's products are manufactured in Dongguan, China and Batam, Indonesia. Volex has been an investor in KST since its formation in 2017, and prior to the Acquisition, held 35.7% of KST.
The Acquisition strengthens Volex's existing Medical business, which focuses on complex cable assemblies carrying power and data within medical equipment such as MRI scanners, robotic surgery devices and diagnostic imaging systems, by extending Volex into patient-connected products used directly in clinical applications. In addition, the Acquisition will provide cross-selling opportunities for both businesses, with limited customer overlap between KST and Volex's existing Medical business, which gives Volex the opportunity to introduce KST's patient-connected products to its global healthcare technology customers while expanding Volex's access to adjacent clinical product categories.
Volex's established relationships with world-leading healthcare technology companies are expected to accelerate KST's growth with new and existing customers.
The Acquisition will be funded from the Group's existing debt facilities and is expected to be immediately enhancing to Volex's underlying earnings from completion, with KST's EBIT margin ahead of the Group's underlying operating margin. The Group expects the return on capital employed to exceed 15% within two years of completion, in line with the criteria set out at the Group's Capital Markets Day in April 2026.
Following the Acquisition, Volex will retain a strong balance sheet, with pro-forma covenant leverage of approximately 1.1x (31 March 2026: 0.8x), providing significant financial flexibility to progress further opportunities in its acquisition pipeline.
KST was founded in 2017 by Scott Hayden, who will continue to lead the business, maintaining its focus on customer markets, technologies and product development alongside the experienced KST management team, which is expected to remain with the business.
To date, KST has been equity-accounted as an associate; from completion it will be consolidated as a subsidiary within the Group's Medical business.
Commenting on the Acquisition, Nat Rothschild, Chief Executive Officer of Volex, said:
"Volex has been an investor in Kepler SignalTek since Scott Hayden founded the business in 2017, and we have supported its growth at every stage since. We know the business, the team and the customers well, and believe combining with Volex's global platform is the natural next step.
"The Acquisition extends Volex from manufacturing the cables and assemblies inside medical equipment to supplying the products that connect that equipment to the patient, with limited customer overlap and clear scope to grow together. We have partnered with Scott and his team over the past nine years. Bringing KST fully into the Group strengthens our Medical business and supports the medium-term plan we set out in April to grow to $2 billion of revenue at a 12% underlying operating margin."
More information on Kepler SignalTek can be found on its website at: www.keplersignaltek.com
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