Light Science Technologies buys Tomtech UK for £0.5m

6th Sep 2023 14:24

(Sharecast News) - Controlled environment agriculture (CEA) specialist Light Science Technologies (LST) announced its acquisition of Tomtech UK on Wednesday, for a total staged cash consideration of £0.5m.

The AIM-traded firm said the acquisition aimed to further diversify its offerings in the CEA domain, and add new revenue streams to the group.

It said the initial payment for the acquisition was £75,000, to be paid immediately, while the remaining payments were scheduled to be deferred over the next 30 months.

As at 31 December last year, Tomtech reported having cash in excess of £0.14m, with its current balance sheet showing approximately £0.28m.

LST described Tomtech as a well-established UK firm specialising in the design, manufacture, and installation of monitoring and control systems for commercial greenhouses and polytunnels, which had been in operation for more than 35 years.

Initially founded as a sole trader business, Tomtech was incorporated as a limited company in 2011.

The acquisition would complement LST's existing portfolio, as Tomtech's offerings presented new artificial intelligence (AI) opportunities for the group, the board said.

LST noted that the acquisition would be immediately earnings-enhancing in the current reporting period.

"We are delighted to have completed our first acquisition since joining AIM," said chief executive officer Simon Deacon.

"Tomtech has an excellent team and reputation with its clients and we believe their range of products and technology know-how will further enhance our industry reach and standing.

"Bringing Tomtech's 35 years of experience into the group's CEA division enables us to provide an important turnkey solution to our customers, providing the technology they need to control the cost of growing, increasing yields and growing all year round."

Deacon said acquiring Tomtech would enhance the company's ability to take its products worldwide, offering a full range of products, setting us apart from competitors in a "very important time" for the CEA market where it was seeing extreme weather patterns affecting food security.

"Bringing Tomtech into the Group will further strengthen our position - the team's added understanding of the requirements of growers in all areas of the Industry from glasshouses and polytunnels to hybrid growing environments in vertical growing, will be a big asset to the enlarged group.

"We are looking forward to working with the team to strengthen our CEA division not just in revenue terms, but also the additional support to grow our partnerships around the world and to broaden our reach."

At 1353 BST, shares in Light Science Technologies Holdings were up 23.56% at 2.78p.

Reporting by Josh White for Sharecast.com.