TIDMIDEA
RNS Number : 6988J
Ideagen PLC
23 December 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
23 December 2020
Ideagen PLC
("Ideagen" the "Company" or the "Group")
Acquisition of Huddle
Ideagen PLC (AIM: IDEA), a leading supplier of regulatory and
compliance software is pleased to announce the acquisition of
Harmony UK Holdings Limited ("Harmony"), known in the marketplace
by its product name Huddle ( www.huddle.com ) (the
"Acquisition").
Acquisition Highlights
-- Huddle is a SaaS-based secure content collaboration and
workflow solution with customers across highly regulated sectors
such as accountancy and governments
-- Used by approximately 380 customers including FAA, Baker
Tilly, the National Audit Office, EDF Energy, Department of Defense
(DoD), UK Home Office and multiple NHS Trusts
-- Harmony is profitable and cash generative and is expected to
be earnings enhancing for Ideagen in the current financial year
-- Provides Ideagen with a strong organic growth opportunity as
part of our Document Collaboration and Compliance product suite
-- Harmony's current annualised run rate revenues are
approximately GBP10.5m of which in excess of 99% is recurring
-- It is anticipated that Harmony will add approximately GBP3.5m
of EBITDA to the Group in its first full financial year of
ownership (being the year to 30 April 2022) after integration and
rationalization of its run-rate annual cost base of approximately
GBP8m
-- Gross consideration of GBP28.1m payable in cash on completion
to be funded by existing resources and the proceeds of recent
placing
About Harmony and Huddle
Harmony is a leading provider of SaaS solutions to a number of
highly regulated sectors including UK and US Government, Healthcare
and Accountancy. Harmony is known in the marketplace by its product
name Huddle. Founded in 2006, Huddle has an established position as
a leading supplier of SaaS based secure content collaboration and
workflow solutions primarily in the UK and USA.
The Company expects that the acceleration towards an enhanced
Digital Workplace will provide increased demand as organizations
look for deep and effective communication with their clients,
suppliers, contractors and partners within a secure
environment.
Harmony is currently generating annualised run-rate revenues of
approximately GBP10.5m and approximately GBP2.5m of adjusted
run-rate EBITDA. The Group expects that the Acquisition will add
revenue of approximately GBP11m and a contribution to the Group's
adjusted EBITDA of GBP3.5m (including c.GBP0.5m of R&D
capitalization in line with the Group's policies) in the year to 30
April 2022 (being the first full financial year of ownership).
Harmony is expected to make a contribution of approximately GBP0.7m
to the Group's adjusted EBITDA for the current financial year to 30
April 2021.
Harmony currently employs 59 people in the UK, USA and South
Africa.
Harmony's most recent available audited accounts are for the 17
month period ended 31 December 2018 in which period Harmony
reported revenue of GBP15.2m, a comprehensive loss of GBP1.7m and
net assets of GBP9.85m.
Strategic rationale for Acquisition
Bringing together Huddle and Ideagen PleaseReview will result in
a compelling offering of secure document collaboration and
compliance software that will meet the needs of the toughest
regulatory environment. Following the Acquisition, the Group will
be extremely well placed to take advantage of the ongoing growth in
regulatory requirements and the increased need for people to be
able to work across an extended enterprise, while maintaining the
ability to collaborate on projects.
PleaseReview is used by 35 out 50 of the world's leading life
science companies and will benefit from the intelligent workspace,
workflows and integrated collaboration capabilities of Huddle.
Huddle will benefit from PleaseReview's market leading real time
content creation, co-authoring and approval processes.
Both applications already provide high levels of compliance and
security making it simple and secure to work with anyone, inside or
outside the organization even when working remotely. Strong
integrations with key providers such as Microsoft Office (including
O365), Google for Work apps and Slack will continue to support
compliant digital experiences to unlock even greater growth, or to
simply improve user productivity.
This opportunity in the emerging regulated collaboration space
as a result of the change in working practices due to COVID is
being seen across all our key markets.
Examples of Huddle use cases:
Client Portal - Enables accountancy firms to build a branded
collaborative space through which they can securely engage with
clients. Huddle provides a deep digital experience providing full,
centralized visibility of information and a single point of entry.
Example customers KPMG, Baker Tilly.
Supply Chain Portal - Enables OEMs to control their brand and
protect IP., used by organizations that need to structure and add
efficiency to their operational and contracting aspects of supplier
management. Example customers NGK.
US Government Contractor Portal - Replaces legacy email, file
sharing and tasking apps within an approved Federal Risk and
Authorization Management Program (FedRAMP) environment to enable US
Contractors to work seamlessly with their customers. Meets all
security standards data protection ensuring compliance with the
federal governments cloud smart policy - Example customer NASA.
Government Multi Agency Collaboration - Government agencies need
to work together to deliver programmes across an extended and
complex environment, which can be challenging due to information
silos across disconnected IT systems. Huddle provides a simple, and
secure way to connect agency teams between firewalls and is
accredited for use across the U.S and UK Government. Example
customer Federal Aviation Authority.
Consideration for the Acquisition
The gross cash consideration payable on completion for the
Acquisition is approximately GBP28.1m, being approximately $38m
converted with the benefit of a foreign exchange hedge. The
consideration will be funded from the Company's existing cash
resources. The Acquisition will complete in approximately 10 days
after satisfaction of certain procedural steps to be taken amongst
Harmony's shareholders.
David Hornsby, Executive Chairman of Ideagen commented:
"We are delighted to announce the acquisition of Huddle. It has
a resilient business model, a quality customer base, outstanding
technology and a strong team. Huddle will be an important product
for Ideagen as we integrate the software with PleaseReview to
deliver a broader and deeper Document Collaboration and Compliance
proposition to our customer base and accelerate ARR growth."
Enquiries:
Ideagen plc 01629 699100
David Hornsby, Executive Chairman
---------------
Ben Dorks, Chief Executive Officer
---------------
Emma Hayes, Chief Financial Officer
---------------
finnCap Limited (NOMAD and Joint Broker) 020 7220 0500
---------------
Henrik Persson / James Thompson / Kate Washington
(Nomad)
---------------
Alice Lane / Sunila Da Silva (ECM)
---------------
Canaccord Genuity Limited (Joint Broker) 020 7523 8000
---------------
Simon Bridges
---------------
Richard Andrews
---------------
About Ideagen plc
About Ideagen plc Ideagen is a UK-headquartered, global
technology company quoted on the London Stock Exchange AIM market
(Ticker: IDEA.L).
A global supplier of regulatory and compliance solutions,
Ideagen provides a common software platform and an integrated risk-
based approach to meet multi-industry standards, enabling
compliance with relevant laws, policies, and regulations.
The Group provides software and services to organisations
operating within highly regulated industries such as life sciences,
healthcare, banking and finance, insurance, aviation, and aerospace
and defence, with its main operational premises spread throughout
the UK, EU, US, Middle East and SE Asia.
Currently, more than 5,700 organisations use Ideagen's products
including eight of the top 10 UK accounting firms, all of the top
aerospace and defence companies and 75% of the world's leading
pharmaceutical firms. Ideagen's diverse and varied customer base
includes many well-known, global brands such as British Airways,
Aggreko, BAE, Ryanair, US Navy, KLM, BBVA, Bank of New York,
Commerzbank, Meggitt, Heineken, Johnson Matthey, Haeco Group and
European Central Bank. As well as this, Ideagen counts 250
hospitals across the UK and US amongst its client base. For further
information please visit www.ideagen.com.
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