Sedgefield manufacturer Filtronic has agreed a £4.2m deal to sell-off its antenna business to a firm in Sweden.
The company revealed plans to sell its antenna business back in October, saying that divesting the division would allow it to focus on more profitable areas of its business
A little over two months later Filtronic has revealed that it has signed a deal to sell the division to Sweden’s Microdata Telecom Innovation Stockholm AB.
The sale will be completed on January 2, 2020, with Filtronic set to receive $5.5m (£4.2m) in cash for the business. The deal is being made on a cash free-debt free basis, meaning Filtronic will keep all of the division’s debt.
However, if the antenna business performs better than expected Filtronic will receive half of its extra gross profits over the next two years. It is expected that the business will make a gross profit of $2m in the first year and $3m in the second year.
Reg Gott, Filtronic’s executive chairman, said: “I am delighted to confirm that we have signed an agreement with Microdata Telecom to purchase our Telecoms Antenna Operations.
“The sale strengthens our balance sheet, simplifies our business, and enables us to focus on business activities that better suit our core strengths.
“Microdata Telecom is an ambitious and rapidly growing company with a strong wireless telecoms pedigree. Being based in Taby, Sweden, it is well known to our telecoms antenna operations and is an excellent destination for our staff, customers and products.”
The deal includes all of the shares in Filtronic Wireless AB in Sweden and some of the antenna manufacturing assets owned by the company’s Chinese subsidiary. Its operating loss for the year ending May 31, was £1.9m.
Filtronic said the money from the sale would allow the business to grow in the 5G, x-haul, public safety communications, and defence and aerospace sectors.
In October Filtronic agreed to pay out £1.6m to one of its customers after selling it a number of faulty antennas in 2016/17. The products were still under warranty meaning Filtronic was forced to repay its customer and fix the devices.
Company CEO Rob Smith also stepped down from his role earlier this year, after leading the company for more than half a decade. His resignation was made after Filtronic revealed its turnover had fallen by more than 25%.
