AB Dynamics PLC has announced the acquisition of Venshure Test Services LLC (VTS), a leading provider of dynamometer-based testing services to the automotive sector in the USA, with a focus on electric vehicles (EV). VTS, headquartered in Chelsea, Michigan, offers a full range of testing services, including mileage accumulation and assessment of EV powertrain and battery performance across various climatic conditions. The acquisition aligns with AB Dynamics' strategic priorities, expanding its capabilities and broadening the scope of services in the Testing Services area.

The maximum consideration payable for VTS is $30.0m, with an initial cash consideration of $15.0m. The acquisition has been completed on a cash-free, debt-free basis, with the initial cash consideration funded from the Group's existing cash resources and short-term utilization of part of the Group's revolving credit facility. Contingent consideration of up to $15.0m will be payable in cash across two tranches for the 2 years following completion, subject to meeting certain performance criteria for both years.

VTS has shown a good track record of profitable, cash-generative growth, with unaudited accounts for the year ended 31 December 2023, indicating revenue of $3.5m, EBITDA of $1.9m, and adjusted operating profit of $1.5m. The Board expects the acquisition to be earnings enhancing in FY24, with revenues for the 5-month period forecast to be approximately $1.8m and adjusted operating profit of approximately $0.7m.

In addition to the acquisition, AB Dynamics has also provided notice of its interim results for the six months ended 29 February 2024, which are expected to be announced on 23 April 2024. The management team will be hosting a presentation for analysts on the day of the results. Dr. James Routh, Chief Executive Officer of AB Dynamics, expressed his pleasure with the acquisition, stating that it expands the Group's testing services provision in the USA and provides an excellent platform for further growth.

The company's CEO, Dr. James Routh, commented, "The acquisition expands both our capability and geographic coverage in the important and growing field of EV battery and powertrain performance evaluation. Customer focus on electric vehicle and battery technology is a long-term trend that will support continued growth at AB Dynamics as competition increases and new vehicle models require additional development work, testing, and validation."

The acquisition of VTS is expected to provide AB Dynamics with an excellent platform for further growth, and the company is looking forward to leveraging its sales capabilities to drive cross-selling and expand further. The VTS team will be welcomed into AB Dynamics, and the company is optimistic about the future prospects resulting from this acquisition.