Acquisition of Majority Stake in Cooper Projects Limited
Midwich Group, a global specialist audiovisual distributor to the trade market, announced it has acquired a controlling stake in Cooper Projects Limited (“the Company”), the parent company of DVS Limited (“DVS”), a UK based distributor of video security products.
Midwich has acquired 65% of the Company’s share capital for an initial cash consideration of £8.6 million, followed by an additional fixed and performance linked amount of up to a maximum of £6.4 million twelve months later. The remaining 35% of the Company’s share capital will be held by Tim Goodson (Managing Director), Gavin Dunleavy (Commercial Director) and David Davies (Chief Technology Officer) who will continue to run the Company.
Based in Cardiff, DVS was founded in 2003 as a specialist distributor of CCTV and associated video recording technologies, in which it has developed a strong market reputation working primarily with leading global brand HikVision. In recent years, DVS has begun to diversify its portfolio to include complementary technologies, such as access control, intercom, and intruder detection.
DVS provides solutions for trade customers throughout the UK, across key verticals including the corporate, retail and residential markets. An extensive range of value add services are provided to customers, including project design, ongoing technical support, bespoke training as well as access to DVS’s proprietary installer programme which enables customers to connect with end-users in their geographic and technology area.
In its latest audited financial statements, which were in respect of the year ended 31 October 2020, the Company generated revenues of £37.4 million and profit before tax of £2.1 million*. Net assets at 31 October 2020 were £7.6 million.
Net debt at completion was around £3.0 million.
The deal will be funded from Midwich’s existing facilities and is expected to be earnings enhancing in the year to 31 December 2022.
Put and call options are in place whereby Midwich can compulsorily purchase (or management can compulsorily sell to Midwich) the remaining 35% of the Company in three years’ time or later, with the capped consideration payable based on pre-agreed formula linked to the financial performance of the Company, up to a maximum of £20 million. The maximum aggregate consideration for the purchase of 100% of the Company is £35 million.
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