Stealth Group (SGI) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands reach into business, trade, and consumer sectors, leveraging Force's wholesale distribution and private label capabilities.

• Targets a leading wholesale distributor in the mobile accessories sector, expanding presence in a large and growing market.

• Complements existing industrial and retail operations, enabling cross-sell and upsell opportunities across 8,000 business accounts.

• Adds manufacturing capabilities and new product adjacencies, supporting growth in both industrial and consumer channels.

• Immediate value accretion and strong pipeline of growth opportunities identified.

Financial terms and conditions

• 100% acquisition of Force for approximately AUD 9.5 million, less than 4x EV/EBITDA for FY2023/24.

• Consideration includes $3.5 million in new shares and assumption of $6.0 million in working capital finance facilities.

• Outperformance payment in FY2026 based on strategic targets.

• Force shareholders to hold 12.52% of Stealth post-transaction.

• Pro forma combined revenue of AUD 159 million and EBITDA of AUD 8.5 million for FY2024.

Synergies and expected cost savings

• Identified AUD 1.2 million in immediate cost savings and AUD 2.3 million in profit gains from new adjacencies, with full benefits by the second year post-acquisition.

• Cross-sell and upsell opportunities expected to drive further margin improvement.

• Operational synergies include supply chain, procurement, and back-office consolidation to enhance efficiency and profitability.