18 September 2024

Mpac Group plc

(''Mpac'', the "Company" or the "Group")

Acquisition of Boston Conveyor & Automation, Inc

Mpac Group plc, a global leader in high-speed packaging and automation solutions, is pleased to announce that it has entered into an agreement with Jim Laverdiere (the "Seller") to acquire the entire issued share capital of Boston Conveyor & Automation, Inc. ("BCA"), a US-based supplier of robotic automation and conveyor solutions to the food, life sciences and general industry sectors (the "Acquisition"). The Board expects the Acquisition to be earnings per share enhancing in the first full year following the Acquisition.

The aggregate consideration for the Acquisition is $17 million, before customary adjustments for cash and working capital, consisting of $11 million in cash (the "Cash Consideration") and $6 million which is being satisfied by the issue of 1,059,349 new ordinary shares in the capital of Mpac at an issue price of 430.0 pence, being the closing mid-market price on 17 September 2024 (the "Consideration Shares"). The Consideration Shares are subject to lock-in and orderly market provisions which are further described below.

The Cash Consideration is being satisfied from the Group's existing cash resources and its Revolving Credit Facility (the "RCF"). As part of the Acquisition, the Group's lender has agreed to increase the RCF by £5 million to £25 million so that the Group retains a strong balance sheet with undrawn borrowing facilities available to fund its ongoing development and working capital.

Background to and rationale for the Acquisition

BCA was founded in 2017 and is a provider of robotic automation and conveyer solutions, principally to the food but also the life sciences and general industrial sectors. BCA is based in Newburyport, Massachusetts and employs 50 staff.

BCA offers a full suite of process-oriented primary and secondary packaging, pick and place lines and conveyor systems, specialising in customised, turnkey systems, including those with hygienic design requirements. The Acquisition operates upstream of Mpac's current solutions offering and represents a compelling fit with Mpac's strategic intent of being a market leader in the provision of full-line packaging solutions for the food and beverage, healthcare and clean energy sectors.

The range of solutions offered by BCA gives further breadth and depth to Mpac's capabilities, with a particular focus on handling and packaging of products. BCA and Mpac have several clients in common and have historically featured together on customer projects underlying the strategic value of the Acquisition.

Mpac will continue to support BCA's strategic growth plans and talented staff, providing access to the Group's resources, global sales and service network to leverage growth opportunities in Mpac's existing core markets of healthcare and food and beverage.

Jim Laverdiere, the former sole shareholder of BCA, will remain with the business as President to continue the next phase of its growth strategy and wider development of Mpac. The acquisition of BCA is expected to deliver sales and service synergies through the leverage of the enlarged Group's customer base and the pull-through of Mpac's existing technologies. The Acquisition provides a significant growth opportunity into EMEA through Mpac's sales presence, a geography previously unaddressed by BCA. In addition, Mpac will benefit from BCA's position of strength in standard and complex conveyor solutions, and food and material handling automation.

Historic financial performance of BCA

BCA's unaudited results on a trailing 12 months to 31 May 2024 showed sales of $14.0 million and adjusted earnings before interest, tax and depreciation of $2.8 million. The unaudited financial statements of BCA for the year to 31 December 2023 showed revenue of $13.4 million and profit before tax of $1.0 million. Unaudited net assets at 31 December 2023 were $1.4 million including net cash of $1.0 million.

Lock in and orderly market provisions in respect of the Consideration Shares

As described above, the Company is issuing the Consideration Shares to the Seller as part of the Acquisition. On Admission, defined below, the Seller will be interested in 1,059,349 ordinary shares representing approximately 4.9 percent of the Company's issued share capital as enlarged by issuance of the Consideration Shares.

The Consideration Shares are subject to a lock-up which ends three years after completion of the Acquisition, except in order to satisfy the Seller's associated tax liability on receiving the Consideration Shares, the Seller is permitted to sell up to one third of his Consideration Shares within the first year after completion once 60 days from completion have passed (the "Tax Permitted Disposal"). The Seller has undertaken that any Consideration Shares sold pursuant to the Tax Permitted Disposal will be effected through the Company's Brokers to ensure an orderly market.

Total Voting Rights

An application will be made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will become effective, and that dealings will commence, at 8.00 am. on 24 September 2024.

Following Admission, the Company will have 21,533,773 ordinary shares in issue, with voting rights attached. Of these, no ordinary shares are held exclusive of voting rights in treasury. Therefore, the total number of voting rights in the Company will be 21,533,773 and shareholders may use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest, or a change to their interest, in the Company.

Adam Holland, Chief Executive of Mpac, commented:

"I'm delighted to announce the acquisition of BCA, another key milestone in Mpac's strategic journey, bringing capability upstream of our Langen and Switchback businesses into the Group's customer offering. BCA is a high-quality business with exceptionally talented employees, and further expands Mpac's physical footprint in North America. I am excited by the opportunity to provide the customers of both businesses with an expanded technology capability. I am equally excited to welcome Jim Laverdiere and the wider BCA team to Mpac."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014

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Notes to Editor

Mpac (AIM: MPAC) is a global leader in engineering and technology, designing, precision engineering, manufacturing, and supporting high-speed packaging equipment and solutions.

Mpac serves 80 countries across four key regions around the world including the Americas, EMEA, APAC and the UK. The Company operates in the attractive growth markets of Food & Beverage, Healthcare and Clean Energy. These targeted markets boast significant growth opportunities.

Through its core product lines - Lambert, Langen, Switchback and SIGA Vision - the Company provides full line Original Equipment and Services for automated high-speed packaging, from assembly of products through to case packing and palletising. Mpac's Service offering ensures a stable and recurring revenue after the sale of Original Equipment.

Mpac is a people-driven business. With more than 600 colleagues around the world including c. 350 dedicated global engineers & designers. The business is also underpinned by innovation, as one of Mpac's key strategic pillars which remains fundamental to the Company's long-term sustainable growth.

Mpac is headquartered in Tadcaster, UK and operates sites in the US, Canada, the Netherlands and Singapore.