Abacus Plc has had a storming year, fuelled mainly by the acquisition of Promax A/S, a Danish distributor it acquired in October 1994, and the Newbury, Berkshire-based electronic components distributor is attempting to repeat the formula with its acquisition of Polar Plc (CI No 2,801). Abacus holds 34 franchises in the UK and Denmark for distributing connectors and passive components. It also manufactures bespoke cable looms and harnesses at its CTL manufacturing subsidiary, and markets passive components with its Dubilier unit. It came to London in November 1993 by way of a placing at 140 pence per share (CI No 2,289). Abacus will acquire Polar – also an electronic components distributor – by means of a share exchange on the basis of 159.6 new Abacus shares for every 100 Polar shares held. This values each Polar share at 443 pence and the fully diluted share capital of Polar at ú35.9m. Full acceptance of the offer will result in the issue of up to 12.9m new Abacus shares, around 28% of the enlarged share capital. Polar’s directors have given undertakings to accept the offer, and they hold 46.5% of the shares. There is also a partial cash alternative, whereby accepting Polar shareholders can elect to receive cash for up to 15% of their holding. Abacus’s acquisition of Promax brought in turnover of ú20m in 11 months, contributing to overall turnover growth of 77% at ú66.4m. Pre-tax profits were up 56% to ú6.6m. The product shortages and price rises, which the company experienced in the second and third quarters, were less evident in the last quarter, which enabled the organic growth rate to reach 23%. Offices were opened in Harrogate, North Yorkshire and Cologne. Promax also opened three offices, bringing the total to eight in Scandinavia, and also won the Scandinavian franchise for National Semiconductor Corp’s products. Abacus’s stake in Promax increased to 87.5% from 75% in May, following the retirement of Bent Kragelung, a company founder. In the year to September 30, Polar reported pre-tax profits of ú1.9m, on turnover of ú27.6m. The board estimated that profits this time would be not less than ú2.4m. The enlarged company will be renamed Abacus Polar Plc, and Brian Murdoch, Abacus’s managing director, will become chief executive, with Keith Carnelley, chairman and chief executive of Polar, becoming Murdoch’s deputy. The two companies have virtually no overlapping customers, they claimed. Abacus’ head-count jumped by 155 people to 335 in the year, of which 68 are employed at Promax. The company pays a final dividend of 3.2 pence, giving a total of 4.8 pence for the year, a rise of 20%. Polar will pay a second interim dividend for the 52 weeks to September 29 of 4.0 pence, subject to the offer becoming unconditional in all respects.
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