TIDMIDEA
RNS Number : 3877R
Ideagen PLC
09 December 2016
9 December 2016
Ideagen PLC
("Ideagen" "the Company" or "the Group")
Acquisition of IPI Solutions Ltd and issue of shares
Ideagen PLC (AIM: IDEA), a leading supplier of Information
Management software to highly regulated industries, is pleased to
announce the acquisition of the entire issued share capital of IPI
Solutions Limited ("IPI") for a net consideration of GBP5.54m ("the
Acquisition").
Highlights
-- IPI is a profitable and cash generative software company that
has developed 'Visual IP' a leading software platform providing
Quality and Compliance reporting
-- Based in Mansfield, IPP was founded in 2005 and currently employs 17 staff
-- IPI has approximately 400 customers across the Aerospace and
Defence, Complex Manufacturing and Life Sciences verticals
including GE Aviation, Sikorsky, Augusta Westland and Meggitt.
-- On a current run rate IPP is generating approximately GBP1.9m
of annualised revenues of which GBP1.4m is recurring.
-- EBITDA profits for the year ended 30 June 2016 were GBP0.6
million after adjusting for GBP0.26 million of costs relating to
the former owners of the business which will not recur. EBITDA is
expected to increase to a run rate of GBP0.8 million in the year
ending 30 April 2018 as certain contracts are delivered and
recurring revenues are recognised.
-- The Acquisition is in line with the Group's strategy of
acquiring complementary businesses with strong IP and recurring
revenues.
-- IPI has outstanding IP that is already integrated with the
Group's Electronic Quality Management product 'Q-Pulse' and extends
our reach into the Manufacturing process within 3 of our target
verticals
-- The Acquisition is expected to be immediately earnings enhancing.
David Hornsby, CEO of Ideagen, commented; "IPI is a valuable
addition to the Group and is in line with our strategy of acquiring
business that have strong IP and healthy recurring revenues. IPP
has established an extremely compelling value proposition and
brings to the Group a complementary solution offering, a talented
workforce and long-term customer relationships which further
consolidates our position in the Aerospace and Defence, Complex
Manufacturing and Life Science verticals."
Enquiries:
Ideagen plc 01629 699100
David Hornsby, Chief
Executive
Graeme Spenceley, Finance
Director
finnCap Limited 020 7220 0500
Stuart Andrews/James
Thompson (Nomad)
Stephen Norcross (Corporate
Broking)
Issue of new Ordinary shares in Ideagen
As part of the consideration for the acquisition of IPI, Ideagen
announces that it has allotted 889,680 new ordinary shares of 1
penny each in the capital of the Company ("Ordinary Shares").
Application will be made to the London Stock Exchange for the
889,680 new Ordinary Shares to be admitted to trading on AIM
("Admission") and it is expected that Admission will become
effective and trading will commence at 8.00 a.m. on 15(th) December
2016.
After Admission, the total number of Ordinary Shares in issue
will be 182,504,108 and the total number of voting rights will
therefore be 182,504,108. This figure may be used by shareholders
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, the share capital of the Company under
the FCA's Disclosure and Transparency Rules.
Consideration for the acquisition of IPI
Net consideration payable is GBP5.54 million being gross
consideration of GBP7.02million less GBP1.48 million of cash
reserves in the business acquired. The consideration is payable as
to GBP4.42 million in cash plus GBP0.5 million of new Ordinary
shares at completion plus deferred cash payments of GBP1.64 million
after 12 months and GBP0.46 million after 24 months.
The GBP0.5 million of new Ordinary Shares issued at completion
is represented by 889,680 Ordinary shares issued at 56.2 pence each
being the average closing mid-market share price of Ideagen shares
over the 20 business days immediately prior to completion.
Acquisition Rationale
The Acquisition is in line with the Group's strategy of
acquiring businesses with strong IP and recurring revenues that
supply GRC Solutions to regulated sectors. IPI has outstanding IP
that has already been integrated with the Group's existing product
set to build a broader and more valuable GRC solution, which will
provide significant cross selling opportunities and a strong
platform for future growth. IPI's solutions are delivered via its
cloud-based platform and further enhances Ideagen's cloud
development strategy, which the Directors believe is an area of
significant growth area for the Group.
IPI has a talented workforce, which will add to the R&D,
support and sales functions of Ideagen. IPI's Founder and CEO,
Brian Harvey, will remain with the enlarged Group and will be
appointed to the role of Business Development Director, reporting
directly to Ben Dorks, Chief Customer Officer of Ideagen, on
completion of the Acquisition.
About IPI
IPI, a Mansfield based software company established in 2003, has
developed and commercialised a proprietary platform 'Visual IPI'
which ensures design and manufacturing integrity for complex highly
regulated programmes. There are currently numerous international
standards, such as AS9102 (First Article Inspection for Aerospace)
that organisations need to comply with that ensure that the design
phase of a programme is aligned with the physical production of
specific components and assemblies. IPI's solutions automate the
processes for A1902 and other similar standards through the
integration and validation of data from disparate systems such as
QMS, CAD, ERP and CMM. IPI combined with Q-Pulse will extend our
reach into our existing customers and prospects.
IPI currently employs 17 staff and has approximately 400
customers
IPI reported unaudited revenue of GBP1.69 million and generated
EBITDA of GBP0.34 million for the year ended 30 June 2016. As at 30
June 2016, IPI had gross assets of GBP1.58 million. In addition IPI
currently has run-rate recurring revenues of approximately GBP1.4
million per annum. IPI is currently debt free with current cash
balances of approximately GBP1.48 million.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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