TIDMAPTD
RNS Number : 5747O
Aptitude Software Group PLC
11 October 2021
11 October 2021
Aptitude Software Group plc
("Aptitude Software" or the "Group")
Acquisition of MPP Global Solutions Limited
Highly complementary product offering and global customer
base
Aptitude Software, the specialist provider of finance
transformation and automation software, is pleased to announce the
acquisition of MPP Global Solutions Limited ("MPP Global"), an
international provider of cloud-based subscription management and
billing technology ("eSuite") for a total enterprise value of
GBP37.1 million (the "Acquisition").
Acquisition highlights
-- MPP Global provides a modular, cloud-based, end-to-end SaaS
solution to large, international, enterprise customers across the
media and publishing sector and a growing number of other
verticals
-- MPP Global's Annual Recurring Revenue ('ARR') at 30 June 2021
is GBP8.0 million across approximately 40 clients
-- MPP Global's eSuite platform is focused on the subscription
economy and provides identity management, CRM, automated billing,
payment processing, and churn management capabilities
-- Strong strategic acquisition rationale, in-line with Aptitude
Software's stated strategy, with the Acquisition accelerating the
Group's product roadmap and competitive positioning in end-to-end
revenue automation
-- MPP Global has a high proportion of recurring revenue,
increasing Aptitude Software's overall recurring revenue proportion
to 62% on a pro forma basis(1)
-- Highly complementary product offering and global client base
presenting a number of cross sell opportunities in both businesses,
including adding strength in new sectors
-- MPP Global brings c. 100 new employees to the Group, most
based in northern England. The business's North West England
headquarters is set to become a second long-term innovation centre
for the Group, with c. 60 team members in the MPP Global Software
and Technology teams
-- MPP Global's founding directors will support the initial integration into the Group
Information on MPP Global
MPP Global's eSuite platform, focused on the subscription
economy, offers a modular, cloud-based, end-to-end SaaS solution to
large enterprise customers, enabling identity management, CRM,
automated billing, and payment processing. MPP Global's customers
are largely located in the European and North American media and
publishing sector alongside a growing number of other
verticals.
MPP Global has significantly broadened the applicability of its
eSuite platform to take advantage of these growing verticals.
eSuite's ability to manage both physical and digital subscriptions
means it is well positioned to expand Aptitude Software's revenue
management offering into an end-to-end subscription, billing, and
revenue automation solution and is expected to provide further
opportunities for automation and growth to Aptitude Software's
existing customer base.
MPP Global's Annual Recurring Revenue ('ARR') at 30 June 2021
was GBP8.0 million across approximately 40 clients. MPP Global's
revenue for the year ended 30 June 2021 was GBP10.4 million with a
profit before tax for the year ended 30 June 2021 of GBP0.1
million. MPP Global's gross assets as at 30 June 2021 were GBP5.1
million, principally made up of cash and trade receivables.
Strategic rationale for the Acquisition
The Acquisition reflects Aptitude Software's stated strategy of
acquiring businesses which accelerate the Group's product strategy,
expand on its capabilities to automate complex finance functions,
and support its continued global growth across a broad range of
sectors.
The Acquisition is also supported by positive global market
tailwinds as dynamics continue to shift towards a
subscription-based economy, observed by Aptitude Software through
its Aptitude Revenue Management client base in medical technology,
advanced manufacturing, and other sectors. The Acquisition will
enable the Group to provide full, end-to-end solutions which
automate the revenue lifecycle of the subscription economy, from
subscriber acquisition and billing through to Aptitude Software's
existing revenue management and recognition capabilities.
The Acquisition will strengthen Aptitude Software's presence in
global technology, media, and telecom verticals where businesses
are increasingly adopting subscription models. Aptitude Software
and MPP Global together support robust product functionality with
deep expertise across multiple industries, and we envision
continued adoption across these verticals for the Group's wider
product suite.
MPP Global has a high proportion of recurring revenue,
increasing Aptitude Software's overall recurring revenue proportion
to 62% on a pro forma basis(1) . Following the Acquisition, the
combined group will be providing revenue automation focused
solutions to over 75 organisations, representing approximately 46%
of the Group's Annual Recurring Revenue. It is anticipated there
will be a number of cross sell opportunities within this combined
client base with MPP Global's eSuite clients also potential users
of the Group's finance transformation products, including the
Revenue Management solution & Aptitude Accounting Hub. Aptitude
Software's clients are potential users of eSuite as
subscription-based business models continue to gain traction in the
Group's target industries.
Given the direct adjacency and advanced technical design of the
products, we envision the integration of Aptitude Software and MPP
Global to be completed in H2 2022, paving the way for new and
sustained growth of a best-in-breed solution for end-to-end revenue
automation.
MPP Global brings c. 100 new employees to the Group, most based
in northern England. The business's North West headquarters is set
to become a second long-term innovation centre for the Group, with
c. 60 team members in the MPP Global Software and Technology
teams.
Terms and financial effects of the Acquisition
Consideration for the entire issued and to be issued share
capital of MPP Global is GBP38.7 million, which includes GBP1.6
million of net cash in MPP Global (the "Consideration"). Of the
Consideration, GBP35.4 million is payable in cash at completion and
will be satisfied using Aptitude Software's existing cash
resources. The balance of the Consideration will be satisfied by
the issue of 492,537 new ordinary shares at an issue price of 670
pence each, being the average mid-market closing price for an
ordinary Aptitude Software share for the 5 business days preceding
8 October 2021 (the "New Ordinary Shares"). These New Ordinary
Shares will be subject to a twelve-month lock-in. It is expected
that a loan facility will shortly be agreed which will provide the
Group with the capability for further well-targeted acquisitions in
the future.
The majority shareholders of MPP Global include Grafton Capital
and AlbionVC, alongside founders Paul Johnson and Chris Cheney (the
"Founders") and their families. The Founders will support the
initial integration of MPP Global into the Group before exiting the
business.
With organisational and product integration costs expected to be
incurred in the first two years of the Group's ownership, the
acquisition of MPP Global is expected to be break even for the
Group by 2023 and earnings enhancing the following year. This
statement is not meant or intended to be a profit forecast and
should not be interpreted to mean that the earnings per share of
Aptitude Software following completion of the Acquisition will
necessarily be above or below the historical published earnings per
share.
The Acquisition is unconditional and has now completed.
Admission of the New Ordinary Shares and total voting rights
Application has been made by the Group to the Financial Conduct
Authority and to the London Stock Exchange for the New Ordinary
Shares, which will rank pari passu with all existing ordinary
shares, to be admitted to the Official List and to trading on the
London Stock Exchange's main market for listed securities
("Admission"). It is expected that Admission will become effective
and dealings will commence on or around 12 October 2021.
On Admission, Aptitude Software's issued share capital will
comprise 57,103,795 ordinary shares of 7 1/3 pence each with voting
rights ("Ordinary Shares"). No Ordinary Shares are held in
treasury. The voting rights of all of the Ordinary Shares are
identical. The figure above may be used by shareholders as the
denominator for the calculation by which they will determine
whether they are required to notify their interest in, or a change
to their interest in, Ordinary Shares in Aptitude Software Group
plc under the FCA's Disclosure Guidance and Transparency Rules.
Jeremy Suddards, Chief Executive Officer of Aptitude Software,
said:
"I am delighted to welcome the MPP Global team and customers
into the Group, expanding both our current offering and future
innovation capabilities. We believe MPP Global is a strong
strategic fit, with both businesses positioned to capitalise on the
growth in Subscription offerings, and we are excited for the new
opportunities the acquisition will bring."
For more information, please contact:
Aptitude Software Via Alma PR
Jeremy Suddards, Chief Executive Officer
Philip Wood, Deputy Chief Executive Officer and
Chief Financial Officer
Ryan Fugate, Vice President, Corporate Development
Investec Bank plc (Advisor and Joint Broker) 020-7597-5970
Sara Hale, Corporate Broking & PLC Advisory
Alex Wright, Corporate Broking & PLC Advisory
Sebastian Lawrence, TMT Investment Banking
Canaccord Genuity Limited (Joint Broker) 020-7523-8000
Simon Bridges / Richard Andrews
Alma PR 020-3405-0205
Caroline Forde
Sam Modlin
Notes
1 Calculated on a pro-forma basis using 12 months revenue up to
30 June 2021 for both Aptitude Software and MPP Global
About Aptitude Software
Aptitude Software's innovative solutions address the growing
trend for finance automation, whether part of a broad digital
finance transformation by a client or to address specific
regulatory requirements. Our various products take data from
complex systems, typically with multiple siloed data sources across
multiple business entities, automate complex accounting
calculations and create a unified view of finance. This allows our
clients to reap numerous benefits including significant
efficiencies, business insights, enhanced control, and regulatory
compliance. Our clients include some of the world's largest
companies, typically organisations with complex financial data and
technology landscapes. Development, together with a growing number
of other services, continues to be performed at the Aptitude
Innovation Centre in Poland with sales, support and implementation
services provided from Aptitude Software's offices in London, North
America, and Singapore.
www.aptitudesoftware.com
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