Acal has entered into a conditional agreement to acquire the Myrra Group through the acquisition of its holding company, Aramys, for an initial €9.5m (£8.3m).
A further future payment of up to a maximum of €1.8m (£1.6m) will be payable in March 2016 subject to the Myrra Group's performance over the three year period to 31 December 2015 following Completion.
Acal continues to develop specialist electronics businesses such as Myrra's customised magnetic electronic product manufacturing activities.
"The Myrra Group has a successful track record of providing custom magnetic electronic products to industrial customers throughout Europe and increasingly in North America, Asia and Africa," said Nick Jefferies, Acal Group chief executive.
"The Myrra Group will have access to our customer base of over 20,000 whilst we will benefit from the Myrra Group's well developed customisation, design and manufacturing capabilities," said Jefferies.
Myrra had sales of €20.8m and an underlying operating profit of €1.7m in the financial year ended 31 December 2012.
It has design and development capabilities in France and China along with manufacturing facilities in China and Poland.
Funding will be provided through a combination of a new debt facility of £8.0m and a cash placing of £6.1m (before expenses) predominantly from existing shareholders.
