TIDMDFX
RNS Number : 9101F
Defenx plc
02 August 2016
2 August 2016
Defenx PLC
("Defenx", the "Company" or, together with its subsidiaries, the
"Group")
Acquisition of Memopal Srl
Defenx PLC (AIM:DFX), the mobile security software solutions
company, announces that it has acquired 95.2% of Memopal Srl
("Memopal"), a cloud backup and synchronisation business (the
"Acquisition") from majority owners Pi Campus Srl, Translated Srl,
Thesis Impianti SpA and a further 14 private investors (together,
the "Sellers") for a total consideration of up to EUR1.78 million
and the assumption of outstanding loans from certain Sellers of
EUR0.56 million.
About Memopal
Memopal, founded in Rome, Italy in 2007, has developed and owns
an innovative cloud storage platform and infrastructure. By
combining predictive software with commodity hardware, Memopal's
proprietary Global File System delivers highly competitive cost per
gigabyte cloud storage plans. Memopal's cloud backup and
synchronisation client software is available across all major
operating systems, including Microsoft Windows, Apple OS X, Linux,
Android and iOS and is available in 16 languages. Today, Memopal
sells in 75 countries to end-users and channel partners such as
Türk Telecom, HGST (a Western Digital company) and ZyXEL.
In the year ended 31 December 2015, Memopal generated revenues
of EUR819,000, EBITDA of EUR370,000, a net profit of EUR67,000 and
had gross assets of EUR1,304,000 as reported under Italian
generally accepted accounting standards. These results would not
have been materially different if reported under the Group's IFRS
accounting policies.
Memopal is based in Rome on Pi Campus, a start-up district and
venture fund built around Translated Srl and Memopal. Memopal will
operate as a subsidiary of Defenx and will be managed jointly from
Pi Campus by its existing management team, which includes its
founder and CEO, Gianluca Granero, along with Andrea Stecconi and
Philipp Prince, CEO and CFO respectively of Defenx.
Benefits to Defenx
The Acquisition is in line with Defenx's stated strategy of
diversifying its product portfolio and growing its customer base by
adding proprietary cloud backup and synchronisation technology as
well as new channel partners to the Group. Memopal's team of 7
staff and 3 consultants will significantly increase the Group's
internal development and customer support capacity that it would
otherwise have needed to recruit.
In addition, bank facilities of EUR500,000 have been negotiated
for working capital purposes and will be available within Memopal.
UniCredit SpA has provided a three-year term loan of EUR400,000.
Banca Sella SpA has provided a one-year overdraft facility of
EUR100,000.
The Acquisition is expected to be earnings enhancing after sales
and cost synergies in the first full financial year.
Consideration
The total consideration is up to EUR1.78 million, of which
EUR0.38 million is deferred. The initial consideration of EUR1.40
million will be satisfied by:
-- EUR0.44 million in cash payable to the Sellers in equal
instalments over a period of up to 24 months ("Cash
Consideration"); and
-- the issue of 621,394 ordinary shares of 1.8p each in Defenx ("Ordinary Shares") to the Sellers ("Consideration Shares"), which based on the mid-market closing share price of GBP1.290 and a GBP:EUR exchange rate of 1.182 on 1 August 2016, are valued at EUR0.95 million.
The Company is also assuming EUR0.56 million of debts owed by
Memopal to certain of the Sellers that will be repaid in equal
instalments over a period of up to 24 months, which together with
the unpaid Cash Consideration, will attract interest at 8.0% per
annum.
The deferred consideration of up to EUR0.38 million will be
satisfied by the issue of up to an additional 238,035 new Ordinary
Shares ("Earn-out Shares"), subject to certain performance
thresholds of the enlarged group being met for the year ending 31
December 2017 as set out below:
-- the achievement of EBITDA of at least EUR4.2 million will
result in the full value of Earn-Out Shares being issued to the
Sellers;
-- the achievement of EBITDA of between EUR3.4 million and
EUR4.2 million will result in a pro rata value of Earn-Out Shares
being issued to the Sellers;
-- no Earn-Out Shares will be issued in the event that EBITDA does not exceed EUR3.4 million.
The number of Earn-Out Shares to be issued will be determined
based on the average mid-market closing share price and the average
GBP:EUR spot rate for each of the five business days up to 29 June
2018.
The implied enterprise valuation for 100% of Memopal is EUR2.49
million assuming payment of the full earn-out consideration.
Settlement, dealing and total voting rights
Application will be made for admission of the Consideration
Shares to trading on AIM, which is expected to occur at 8.00 a.m.
on 8 August 2016. Following admission of the Consideration Shares,
the total number of Ordinary Shares in issue will be 6,720,306.
Defenx does not hold any Ordinary Shares in treasury. The
Consideration Shares will rank pari passu in all respects with the
existing Ordinary Shares.
The aforementioned figure of 6,720,306 Ordinary Shares may be
used by shareholders in the Company as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, Defenx
under the Financial Conduct Authority's Disclosure and Transparency
Rules.
This announcement contains inside information.
Andrea Stecconi commented:
"This is an extremely exciting development for Defenx and
Memopal. The bundling of Defenx's security software with Memopal's
cloud backup and sync product offers a compelling proposition to
channel partners and end-users alike. With Memopal's location at
the heart of Pi Campus in Rome, the Group will gain access to a
great pool of talent and ideas. We look forward to integrating
Memopal's products, customers and team into Defenx to further
deliver shareholder value."
Enquiries
Defenx PLC
Andrea Stecconi - Chief Executive
Officer
Philipp Prince - Chief Financial Officer 020 3769 0687
Strand Hanson Limited (Nominated and
Financial Advisor)
Richard Tulloch / Ritchie Balmer /
James Bellman 020 7409 3494
WH Ireland (Broker)
Adrian Hadden / Nick Prowting 020 7220 1666
IFC Advisory (Financial PR and IR)
Tim Metcalfe / Graham Herring / Heather
Armstrong 020 3053 8671
About Defenx
Founded in 2009, Defenx is a fast-growing and profitable
security software company that offers a range of products for the
mobile, PC and network security markets. Defenx security software
is priced competitively, fully featured and efficient (reduced use
of memory, processing capacity and therefore power).
A flexible marketing strategy, focused on white-label and
profit-share arrangements with distributors, telecoms companies and
hardware manufacturers, enables Defenx to compete with established
industry incumbents. Since inception, Defenx has sold over 3.1
million security software licenses, primarily in Europe, the Middle
East and Africa.
Defenx's global distribution partners currently include 3Italia,
the fourth largest Italian mobile network operator, and Seagate
Technology, a world-leader in disk drive manufacturing, amongst
others including telecoms operators, systems integrators and
original equipment manufacturers. Defenx was admitted to trading on
AIM on 3 December 2015, raising GBP2.1 million to accelerate its
growth through new channel partners and product development.
About Memopal
Memopal's mission is to organize and protect digital data.
Memopal was founded in 2007 by Marco Trombetti and Gianluca
Granero, two successful entrepreneurs in the IT sector. Marco
Trombetti is the co-founder and CEO of Translated Srl, one of the
web's most influential companies in translation and recently named
in the Tech Tour Growth 50 of Europe's fastest growing companies,
and Gianluca Granero, who at the time was head of the technology
division at Thesis Impianti SpA, a company that builds and manages
data centres used by companies such as IBM, Telecom Italia and
Procter & Gamble.
Today, Memopal supports over 700,000 end users and channel
partners in the telecommunications, information storage and IT
security sectors in 75 countries.
About Pi Campus
Pi Campus in Rome is both a startup district and a venture fund
that invests in talent. It provides startups with money, mentorship
and the best possible work environment for growth. It started off
in the basement of a single luxury residential villa where two
companies were based: Translated Srl, the first internet-based
translation service and Memopal, a backup technology used by
storage manufacturers, telcos and anti-virus services. In 2013,
Memopal moved to the nearby villa and reserved desks for new
startups. Pi Campus now hosts 16 startups and companies across 5
villas. It is recognized as hub of innovation and has created over
170 jobs.
Websites
www.defenx.com/company/investors
www.memopal.com
www.picampus.it
This information is provided by RNS
The company news service from the London Stock Exchange
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