The acquisition of CSS, for which Sondex will pay a maximum of Ca$3.7million (£1.6 million) funded entirely with cash from the balance sheet, adds a complimentary product line to Sondex's portfolio and contributes to the Company's international expansion strategy.
CSS is the market leader in the supply of downhole Cement Bond Logging equipment, a well inspection process, with revenues of Ca$5.6 million (£2.45 million) and earnings before tax of Ca$730,000 (£319,460) for the financial year ended 30 September 2003. As at 30 September 2003, CSS had proforma net assets of Ca$1.711 million (£744,000).
Approximately 80% of CSS's business is currently in North America. However, since the new product range has a similar target customer base, Sondex expects to leverage off its own international customer base to expand sales into other regions. Equally Sondex intends to use CSS's existing office and team of 35 people to support further sales of Sondex products into Canada.
Sondex continues to experience positive trading conditions within its core businesses and is trading in line with expectations.
Martin Perry, Chief Executive of Sondex, said 'This acquisition brings Sondex an additional market leading technology which we can introduce to our current customer base and is an important step in continuing our international expansion strategy'
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