Stealth Group Holdings acquisition announcement

Stealth Group Holdings, Ltd (ASX: $SGI) has announced the acquisition of Force Technology International Pty Ltd, a prominent distributor of consumer mobile accessory products in Australia. The acquisition involves Stealth acquiring 100% of the shares in Force for approximately $9.5 million, with additional outperformance incentives tied to specific profit targets. The transaction is expected to enhance Stealth's position in the market and expand its product offerings and distribution network.

Executive commentary on the acquisition

Group Managing Director and CEO Mike Arnold expressed, 'This acquisition marks a significant milestone and an exciting new chapter for both Stealth and Force. By integrating Force, we are strategically positioned to leverage their extensive distribution network and customer base, whilst providing Force with new customer channels in business and trade. This move will accelerate our growth, introduce new products, importantly our own-label range, and enhance our market penetration. The synergies from this acquisition, combined with expanded customer channels and increased operational efficiencies, will drive significant value for Stealth, enhancing our competitive edge and delivering stronger returns for our shareholders.'

Summary of the acquisition and outlook

Stealth Group Holdings' acquisition of Force Technology International Pty Ltd for approximately $9.5 million is aimed at strengthening its position in the market and expanding its product range and distribution network. The acquisition aligns with Stealth's strategic focus on higher-margin, capital-light, cash-generative, diversified, scalable, own-label and private-label product ranges, exclusive brands, and a nationwide distribution network. The combined Stealth and Force business is projected to have revenue of approximately $159 million and EBITDA of around $8.5 million, before transaction costs. With the expected growth areas in FY25, including synergies and new revenue contributions, Stealth aims to surpass its long-term guidance of $200 million in sales for FY25. The acquisition is anticipated to drive significant value for Stealth, enhancing its competitive edge and delivering stronger returns for its shareholders.