Oxford Instruments, a provider of high technology tools and systems for industry and research, eyes greater growth in the US after acquiring Platinum Medical Imaging for an initial $18 million (£11.2 million).
Oxford Instruments, a provider of high technology tools and systems for industry and research, eyes greater growth in the US after acquiring Platinum Medical Imaging for an initial $18 million (£11.2 million)
The amount for Platinum, which is being acquired from its management, is debt-free and cash-free, according to a statement from the Oxfordshire-based business. However, the transaction includes a deferred additional amount of up to US$37 million payable over three years that is dependent on performance.
US-based Platinum provides parts and services for MRI (Magnetic Resonance Imaging) and CT (Computed Tomography) medical imaging instruments. It has 33 staff across two sites in Florida and California who sell parts, carry out repairs and do system rebuilds.
The statement continues that the merged group will take advantage of a ‘growing opportunity in this third party service market’ in the US as healthcare reforms encourage medical imaging facilities to move to more cost-effective service providers.
After adjusting for non-recurring items, Platinum generated EBIT of $2.3 million in the year to 31 December 2010 from revenues of $14.1 million. At 31 December 2010, Platinum had gross assets of $3.6 million.
The acquisition will be funded from existing facilities and is expected to be earnings per share enhancing in the current year.
Jonathan Flint, chief executive of Oxford Instruments, comments, ‘This acquisition, which is the first within our service sector, is consistent with our 14 cubed objectives to target 14 per cent compound annual revenue growth and return on sales of 14 per cent by 2014. MRI service is the cornerstone of our Service sector and with Platinum, our position is substantially strengthened in the US market.’