SDI Group - latest acquisition gives entry to defence sector business, shares 81p, brokers TP 140p

Mark Watson-Mitchell - 13.02.2026

I have to say that I do like the look of this group's latest deal, taking it into a strong trend sector that gains significant investor interest.

This morning SDI Group (LON:SDI) announced that it has acquired PRP Optoelectronics for a net £9.3m, marking its entry into the avionics markets with essential components for programs like the Eurofighter Typhoon, F-16, and F-22 Raptor.

PRP, which is a profitable business with £5.99m in revenues and £1.54m in EBIT for the year end-December 2025, designs and manufactures custom high-performance microLEDs and LED light engines.

The group declared that this acquisition is expected to be earnings enhancing in its first full year and will integrate into SDI's Industrial & Scientific Sensors division, further strengthening its aerospace industry penetration.

The cash consideration of £11.3m, plus deferred consideration, will be funded from the Group's revolving credit facility.

The Business

The group is a mix of small to medium-sized companies with specialist industrial and scientific products in growth sector niches which help solve customers' key challenges.

It specialises in the acquisition and development of companies that design and manufacture specialist products for use in lab equipment, industrial & scientific sensors and industrial & scientific products.

The group's portfolio of businesses supplies the life sciences, healthcare, plastics and packaging, manufacturing, precision optics and measurement instrumentation markets.

The corporate aim of SDI is to continue its growth through driving the organic growth of its portfolio companies and by the acquisition of complementary technology businesses with established reputations in global markets.

About PRP Optoelectronics

Established in 1989, the company initially built its reputation in the defence sector, providing ruggedised LED displays for military avionics and instrumentation.

PRP has since expanded its expertise to include monolithic LED arrays and micro LED technology, serving a diverse range of industries including military and civil aviation (including platforms such as Eurofighter Typhoon, General Dynamics F-16, Lockheed Martin F-22 Raptor and Airbus A320 amongst others), medical photodynamic therapy, and industrial printing.

PRP employs 33 people and is based in a 20,000 sq ft. site in Swindon, UK.

Managing Director, Kevin Peart and Technical Director, Sam Cox (the majority shareholders) will remain with the business in a full-time capacity.

Management Comment

SDI's CEO Stephen Brown stated that:

"The acquisition of PRP is a significant milestone for SDI, marking our entry into the avionics markets.

The business boasts a range of products in a very particular niche, which have applications across multiple sectors, including in aviation and on platforms, including the General Dynamics F-16 and Airbus A320 among others.

PRP is a profitable business, with strong revenue visibility and an international customer base which meets our key acquisition criteria.

We're enormously excited to welcome the PRP team into the Group and looking forward to working with them as they execute on their new business pipeline, and as we continue to drive the Group forward with our organic and inorganic growth strategies."

Brokers View

Analyst Andrew Buxton, at Cavendish Capital Markets, rates the shares as a Buy, with a Target Price of 140p.

For the year to end-April, he is going for group revenues of £76.0m (£66.2m), with adjusted pre-tax profits rising to £9.8m (£8.5m), generating earnings of 7.1p (6.2p) per share.

The 2027 year could see £84.1m sales, £11.2m profits and 7.8p in earnings.

"We see strong upside in the shares as organic and acquisitive growth combine with margin improvement to drive EPS growth."

Eurofighter Typhoon

PRP Optoelectronics developed a dedicated warnings panel display system for the Eurofighter Typhoon. The panel features a 28-caption display with 24 fully programmable bi-colour captions with over- and underlines, and three fixed legend captions, all fitted into an extremely tight space envelope. The display system designed by PRP incorporates many novel features in both the hybrid construction and drive electronics. The LED display modules utilise both analogue and digital ASIC technology and advanced multi-level MCM-C construction.

These shares are wrongly priced and are totally capable of shortly breaking the 100p barrier.

I now set a new Target Price at 100p.

(Profile 28.10.20 @ 76p set a Target Price of 95p*)

(Profile 13.02.26 @ 81p set a Target Price of 100p)