discoverIE Group - Accretive acquisition drives FY19 growth

discoverIE has further expanded its design and manufacturing business with the acquisition of Santon, a Dutch DC switch manufacturer, for initial consideration of €27m/£23.7m. The deal nearly doubles discoverIE’s sales into the renewables sector as well as increasing the level of business from Asia. Management expects the deal to be earnings accretive in FY19. We forecast that the acquisition will increase FY19e normalised EPS by 9% and will result in a net debt/EBITDA ratio of 1.7x by the end of FY19.