10 September 2024
CPPGroup Plc
("CPP
Group", "Group", or the "Company")
Accelerated disposal of Globiva
CPP Group (AIM: CPP), a provider of
real-time, digitally delivered assistance products which reduce
disruptions to everyday life for millions of people announces that
it has completed the disposal of its 51% interest in Globiva
Services Private Ltd ("Globiva") for a total cash consideration of
approximately £3.8 million (415.5 million rupees) (the
"Transaction").
Background
The Group held a 51% majority
interest in Globiva, a Business Processes Management company
incorporated in India, with the other 49% of the shares
beneficially owned by the three founders of Globiva, Navneet Gupta,
Vikram Singh Nathawat, and Ashish Goyal, who manage the business
(the "Globiva Founders").
On 27 November 2023, the Group
confirmed that it had agreed with the Globiva Founders to the
disposal of its 51% interest in Globiva over a three-year period
concluding in Q1 2027. The total aggregate consideration of
approximately £4.7 million1 (515.0 million rupees) was
based on forecast EBITDA for the 2023, 2024 and 2025 financial
years and subject to a maximum adjustment of plus or minus 10% (the
"Original Agreement").
Disposal
Globiva's earnings outlook, due to a
general slowdown in the Indian technology market, has deteriorated.
At the request of the Globiva Founders the Group has agreed to
accelerate the disposal of its interest in Globiva, previously
scheduled to complete in Q1 2027, and in accordance with the
Original Agreement to apply the 10% reduction to price.
The revised consideration of £3.8
million (415.5 million rupees) reflects the lower end of the
Original Agreement and is net of the benefit accruing (a net
present value adjustment) to the Group of receiving the cash
consideration in full on completion rather than over a three-year
period.
For the 2023 financial year, Globiva
contributed EBITDA of £2.2 million to the Group's overall EBITDA of
£3.5 million (restated), albeit the Group's shareholders only
ultimately benefitted from 51% of Globiva's results. As at 31
December 2023, Globiva had net assets of £4.2 million. The proceeds
from the Transaction will support the Group's transformation to a
digitally led parametric business.
The Transaction constitutes a
related party transaction, pursuant to Rule 13 of the AIM Rules for
Companies, as the Globiva Founders are Directors of Globiva. The
Group's Directors consider, having consulted with the Company's
nominated adviser, Panmure Liberum Limited, that the terms of the
Transaction are fair and reasonable insofar as the Company's
shareholders are concerned.
Simon Pyper, CEO of CPP Group,
commented:
"The accelerated disposal of Globiva
is consistent with our strategy and is another positive step as we
simplify the Group and transform to a digitally led parametric
business."
1 Calculated at current
exchange rates. The Indian rupee has weakened since November 2023
reducing the expected Sterling consideration.
Enquiries:
CPP Group plc
Simon Pyper, Chief Executive
Officer
Tel: +44 (0)7917 795601
David Bowling, Chief Financial
Officer
Panmure
Liberum
(Nominated Adviser and Sole
Broker)
Tel: +44 (0)20 3100 2000
Richard Lindley
Will
King