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(Sharecast News) - AB Dynamics said on Thursday that it has bought Michigan-based eMpulse, a designer and supplier of advanced servoelectric test systems to the global automotive industry, for an initial cash consideration of $11m (£8.1m).
Under the terms of the deal, there is a contingent consideration of up to $15m (£11m) payable in cash across three tranches for the three years following completion, subject to meeting certain performance criteria in each performance period.
AB Dynamics said the acquisition supports the expansion of its capabilities in the Testing Products division, specifically in relation to laboratory testing equipment, where eMpulse's product portfolio is seen as "highly complementary" to the group's existing servoelectric test system offering, the Suspension Parameter Measurement Machine (SPMM).
Chief executive Sarah Matthews-DeMers said: "eMpulse's product suite is highly complementary to the group's existing portfolio, specifically as an adjacent product to our SPMM, both in relation to its customer base and its servoelectric technology, which provides increased performance and greater energy efficiency compared to its hydraulic alternatives.
"eMpulse has a first-class reputation for providing testing products to its North American OEM customer base and we look forward to leveraging the established global customer relationships and sales capabilities of AB Dynamics to drive cross-selling and expand this further internationally.
"We expect the acquisition to provide us with an excellent platform for growth and we are delighted to welcome the eMpulse team to AB Dynamics."
At 1026 BST, the shares were up 2.2% at 798p.
Broker Shore Capital, which rates AB Dynamics at 'buy' with a 1,200p price target, said: "We view the strategic rationale positively. Combining eMpulse's products and North American position with AB Dynamics' global customer relationships, sales infrastructure and support network should broaden the Group's addressable market and deepen its penetration of existing accounts.
"Management sees meaningful cross- selling potential, particularly in markets where eMpulse has historically maintained a limited direct presence, including Japan. Its servoelectric technology also offers increased performance and greater energy efficiency relative to hydraulic alternatives."
Headquarter in Bradford on Avon, AB Dynamics is a designer, manufacturer and supplier of advanced testing, simulation and measurement products and services to the global transport market.
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