When reporting a strong full-year result last October, Scott Technology reiterated it remained on the acquisition trail, being debt-free and cash-rich.
The company started its current financial year with a record $80 million order book and $26 million cash in hand, underpinned by Brazilian food giant JBS having taken a controlling 50.1% stake in the company in April 2016 for more than $40 million.
Scott chairman Stuart McLauchlan said yesterday the purchase of Alvey Group, with 250 staff across Belgium, the Czech Republic, France and the UK, would accelerate its access to international markets.
The acquisition was made from cash in hand and the target purchase date was April 4, he said.
''This is a key development that adds to our overall automation capabilities, while helping fulfil our strategic expansion goal and accelerating our access to international markets,'' he said.
Alvey specialises in tailor-made industrial automation systems, including packaging of part-finished or finished products, using palletisers, conveyors and stacker cranes. It also has its own warehousing software package.
Alvey's current owners, including its managing director, would stay with the company and had an earn-out clause in the purchase, Mr McLauchlan said.
While the Alvey purchase gave Scott access to skills and technology faster than they could be developed in-house, Scott could expand Alvey operations into Germany, the US, New Zealand and Australia and China.
''Here [in NZ] there's meat works and warehousing; any back-end operations which need automation,'' he said.
Staff would not be seconded to Belgium and Alvey would come under Scott's German-based operations team.
Alvey's revenue to March was $56.5 million, or 42% of Scott's revenue for the same period, meaning Alvey would contribute positively to Scott's revenues this financial year.
Previous acquisitions during the past decade have exposed Scott to a wide range of niche sectors.
They include superconductor magnetic motors, specialist assay sampling machines for the mining sector, new bandsaw safety technology, robotic automation and robot refurbishment and precision metal parts stamping.
Mr McLauchlan said Alvey was one of more than 30 potential acquisitions under consideration.
While about 75% of the present cash on hand had been spent, he did not rule out potential future acquisitions.
''We've used a good part of the cash, but we're always keeping an eye out for other acquisitions,'' Mr McLauchlan said.
Scott shares, which at $3.22 were more than 40% up on a year ago, traded up 2.5% to $3.30 following the announcement.
