GCILight Science Technologies soars on Tomtech acquisition
() , a specialist in controlled environment agriculture (CEA) technology and contract electronics manufacturing (CEM), announced the acquisition of UK-based Tomtech Limited for £500,000 in cash. Tomtech designs, manufactures, and installs monitoring and control systems for commercial greenhouses and polytunnels.
Light Science said the initial cash outlay was £75k, with the remaining payments being deferred over the next 30 months. On 31 December 2022, Tomtech's balance sheet had £140k in cash, and currently estimated at £284k.
The acquisition will bring new controlled environment agriculture (CEA) revenue streams to Light Science, complemented with AI opportunities. This should grow revenues with a proportion of recurring sales on maintenance contracts. As a result, Light Science's group earnings should see an immediate boost in the current reporting period.
Simon Deacon, CEO of Light Science Technologies, commented: "We are delighted to have completed our first acquisition since joining AIM. 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. Acquiring Tomtech enhances our ability as a group to take our products worldwide, offering a full range of products, which sets us apart from our competitors in this very important time for the CEA market where we are seeing extreme weather patterns worldwide affecting our food security."
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Light Science's first acquisition was met with enthusiasm by investors who boosted the company's shares by 24.4% on Wednesday. Tomtech is a well-established name in the agritech business with a loyal customer base in the UK and Ireland built over decades. Light Science will see an immediate boost to its balance sheet with new CEA revenue streams from 160 customers, recurring maintenance contracts, and a cash balance. The merger should be integrated smoothly as the two companies are highly synergistic.
The addition of Tomtech's product range will also enhance Light Science's market reach and cross selling opportunities, creating an overall more holistic offering. The combination of Tomtech's AI and Light Science's digital platforms will give the enlarged business a competitive edge in that space as well as agricultural demand for AI in control systems continues to grow.
Tomtech's product range includes control systems and software, irrigation, lighting, sensors, and venting. Its systems can be used across multiple crops in glasshouses and other horticultural environments. Additional long-term recurring revenues will be generated via maintenance, servicing, and software contracts. Tomtech's business closely complements Light Science's existing CEA offering, and will sit within the former's CEA division post-acquisition.
Tomtech traded profitably in the last 4 years, with its most recent unaudited profits before tax at £79k on sales of £680k, of which £49k was recurring revenue.
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