MTL Instruments Group plc, a supplier of products to the process control and telecom industries, has bought Elpro International, an Australian developer and supplier of wireless systems.
MTL Instruments Group plc, a supplier of products to the process control and telecom industries, has bought Elpro International, an Australian developer and supplier of wireless systems.
Elpro, which supplies its systems to the manufacturing and utility markets, was sold by its directors and the Queensland Development Fund for £12 million.
The terms of the deal include the repayment of bank and shareholder loans totalling £1.1 million. Elpro’s management remain with the business following the completion of the deal.
Under the terms of the deal, MTL has bought three entities – Elpro International, the holding company; Elpro Technologies, the Australian-based operating company; and
Elpro Technologies LLC, its US operation.
Elpro complements MTL’s operations and strengthens its open control components portfolio. It also adds a wireless capability to its product range as end-users seek to add more measurement points on their plants without paying for extra wiring.
MTL’s chief executive, Graeme Philp, said this acquisition will help the company to continue to grow. “Wireless technology is forming an increasingly important part of the signal and data communication layer on modern process plants.
“MTL is already a leading supplier of components for this communication layer and now, with the addition of Elpro, we can provide interconnect solutions using all major technologies, including traditional analogue, foundation fieldbus, industrial ethernet, optical and wireless,” he added.
HSBC, which was led by Robin Penfold, provided senior debt to fund the Elpro acquisition as well as provide working capital for the enlarged MTL Group.
Penfold, head of Corporate Banking for the Home & Eastern Counties, said: “We had been in discussion for some time with MTL over the global benefits HSBC could bring to the group. Immediately, we were made aware of the transaction pre-credit support provided to the advisers of Elpro and this was followed within a couple of days by full credit approval.”
MTL was advised on the UK legal aspects of the deal by Barlow Lyde & Gilbert LLP (BLG), while the Australian issues were handled by Michael Beaumont, a partner of Herbert Geer & Rundle (HGR) in Sydney.
HGR advised on all Australian legal aspects of the transaction providing specialist corporate, employment and pension advice.
Beaumont said the firm was introduced to the deal by BLG, which he has worked with on previous transactions.
“This was a true cross-border transaction with the purchaser in London, the seller’s corporate adviser in the US, Herbert Geer & Rundle in Sydney and the target based in Brisbane.
“The purchase was governed by Australian law and we were required to ensure MTL understood the differences between Australian and UK laws,” he added. “This required close collaboration between MTL’s advisers to ensure consistent risk allocation.”
BLG’s team was led by senior associate Helen Johnson, who said the firm has a long-standing relationship with the group.
The majority of MTL’s products are used in hazardous environments such as the petrochemical, chemical and oil and gas production industries.
Elpro designs, develops and manufactures a range of wireless interconnect products that receive and transmit plant data in industrial environments. In the 12 months to the end of June last year, Elpro reported a pre-tax profit of £500,000 from a £3.4 million turnover.
