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Fairey makes its big wish come true.

Electronic instrument maker Fairey yesterday made its largest acquisition, nearly doubling its turnover by agreeing to buy European rival Spectris for pounds 126 million plus pounds 40 million debt.

The deal, which will give Fairey a strong foothold on the continent helped its shares leap 11 per cent.

Fairey, which bought Solihull-based Burnfield in 1997 for pounds 58 million, will fund part of the purchase by raising pounds 54.4 million via a one-for-six rights issue at 355p.

On the market, its shares climbed 481/1p to 4871/1p yesterday.

Spectris makes instruments for process industries in plants in Denmark, Sweden and Germany and is owned by German holding company AGIV.

The deal, which is subject to shareholder approval, will boost Fairey's underlying earnings in the first year of ownership.

Chief executive Mr John Poulter said: 'It brings us several high quality operations characterised by leading market positions, high gross margins, strong cash generation and sound growth prospects - whilst being earnings enhancing.'

Spectris made pounds 15.1 million operating profit on turnover of pounds 200 million last year while Fairey made pounds 34.7 million on pounds 275 million sales.

Mr Poulter stressed: 'We are paying around 80p for every pound of sales.'

Fairey said its own sales and profits in the first quarter of the current financial year were significantly ahead of 1999 levels but declined to give levels.

Last month when Fairey reported its annual results it said it had been helped by an improvement late in the year, amid the upturn in Asian economies.

Burnfield no longer exists as an operating company, although its two subsidiaries - Malvern which makes particle detectors in Worcestershire and gauge-maker Beta in High Wycombe - are still part of the group.
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Author:City, Robert Lindsay
Publication:The Birmingham Post (England)
Date:May 4, 2000
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