600 Group buys US laser firm

CMS provides custom-designed and fully-automated laser process machines
CMS provides custom-designed and fully-automated laser process machines
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Machine tool maker 600 Group has bought American firm Control Micro Systems (CMS) for £8m, its first acquisition since it completed the buyout of its UK pension scheme liabilities to pave the way for future acquisitions.

Elland-based 600 said CMS is an industry-leading solutions provider for integrated laser applications. CMS provides custom-designed and fully-automated laser process machines and systems to a diverse base of US and international blue-chip customers.

600’s executive chairman Paul Dupee said: “The acquisition of CMS significantly enhances the group’s laser business and marks a further step forward in our strategy of building a global business across increasingly diversified niche markets worldwide.

“CMS has a long-established track record for delivering high quality customer solutions and will likewise benefit from the group’s established sales platform and marketing capability.”

600 said the use of industrial lasers is growing worldwide, providing a large market opportunity as laser systems become a mainstream and integral manufacturing process.

It said the acquisition of CMS is highly complementary to its existing laser business, enhancing its customer offering by providing ever more sophisticated, value-add and custom solutions to customer requirements.

The business is being acquired from founder and sole owner Tim Miller, who will remain with the business for a minimum period of three years to oversee the transition and provide technical expertise.

Last month 600 completed the buyout of its UK pension scheme liabilities. The firm said the completion of the transaction will give the group significantly greater liquidity and financial flexibility. It said the £4m post-tax cash surplus will be used to fund working capital, invest in product development, supplement organic growth and enable value-enhancing bolt-on acquisition opportunities.

Analyst Eric Burns at WH Ireland said: “A few weeks post completion of the buyout of its legacy defined benefit pensions scheme, 600 has put its capital to good use purchasing CMS, a very profitable US-based laser specialist.

“CMS will be an attractive addition to 600’s TYKMA laser marking subsidiary and the terms of the deal mean it will be immediately earnings enhancing. On some fairly conservative assumptions, we put through a 13 per cent upgrade to current year earnings per share even though this is only a nine month contribution.”