TIDMIDOX
RNS Number : 2151O
IDOX PLC
17 August 2017
17 August 2017
Idox plc
("Idox", the "Company" or the "Group")
Acquisition of Halarose Holdings Ltd
Positions Idox as UK's second largest supplier of electoral back
office software and services
Idox plc (AIM: IDOX), a leading supplier of specialist
information management solutions and services, is pleased to
announce that it has acquired the entire issued share capital of
Halarose Holdings Ltd ("Halarose") (the "Acquisition"), a supplier
of electoral back office software and services to UK local
authorities, for GBP5.0 million, comprising GBP3.5 million in cash
and GBP1.5 million in shares.
Highlights of the Acquisition
-- The acquisition is in line with Idox's strategic focus on,
and investment in, the public sector and will be fully integrated
into Idox's existing elections business unit, Idox Elections
-- Creates a larger, more effective and focussed Idox Elections
business capable of accelerating its growth and increasing its
market share through cross selling initiatives to existing and new
customers in the UK and Europe
-- Revenue and cost synergies are expected to enhance Idox's
earnings in the first full year of ownership
Description of Halarose
Halarose, originally established in 1978 and based in
Oxfordshire, develops, markets, sells and supports a range of
electoral back office software and services to UK local
authorities. It enables its customers to be more efficient both in
the production and management of the electoral register and in the
running of elections and referenda. Halarose's 76 clients include
some of the largest local authorities in the UK including
Birmingham, Leeds, Lothian and Lanarkshire. The senior management
team of Halarose will remain with the business post-acquisition for
a minimum of two years.
Reasons for and benefits of the Acquisition
The Acquisition is in line with Idox's strategic focus on, and
investment in, the public sector. Following the Acquisition, Idox
will significantly enhance its market position in electoral back
office software and services and will become the second largest
supplier in the UK. The Acquisition is expected to accelerate Idox
Elections' organic growth and increase its market share. This will
be achieved by offering the combined, enhanced suite of products
and services to both existing and new customers, whilst also
providing a platform for further European expansion.
In line with Idox's strong acquisition integration track record,
the enlarged business will be combined, trading as Idox Elections,
part of the Group's Public Sector Software segment. The Group
expects to derive significant synergies from the integration of
office locations, support functions and a single suite of
products.
Financial impact of the Acquisition
For the financial year ended 31 May 2017, Halarose generated
revenue of GBP3.3 million - with recurring revenues accounting for
c.50% of annual revenues - and EBITDA of GBP1.1 million. Net assets
were approximately GBP4.8m (all numbers unaudited). Halarose, which
is being acquired debt-free and cash free, has been consistently
profitable, delivering double digit annual organic revenue growth
last year. For the 12 months ended 31 May 2017, the combined Idox
Elections business had pro forma unaudited revenues of GBP7.5m. The
Acquisition is expected to be earnings enhancing in the first full
year of ownership.
Terms of the Acquisition
The consideration of GBP5.0 million comprises GBP3.5 million in
cash, funded from the Group's existing debt facilities, and GBP1.5
million in new ordinary shares of the Company ("Ordinary Shares"
and "Consideration Shares"). The new Ordinary Shares are being
issued to the vendors at 61.5 pence per Ordinary Share, being the
mid market closing price on 15 August 2017. The vendors have
undertaken to the Company that, subject to certain limited
exceptions, they will not sell or otherwise dispose of, or agree to
sell or dispose of, any of their respective interests in the
Consideration Shares at any time during the period of 12 months
from 16 August 2017, following which certain orderly market
provisions will apply.
Admission of the new Ordinary Shares and Total Voting Rights
Application will be made to the London Stock Exchange for the
2,439,024 new Ordinary Shares, which will rank pari passu with the
existing Ordinary Shares in issue, to be admitted to trading on AIM
and admission is expected to become effective on or around 23
August 2017.
Following the issue of these shares, the Company's total issued
share capital is 410,631,216 Ordinary Shares. The Company holds
1,491,219 Ordinary Shares in treasury. Therefore the total number
of Ordinary Shares in issue excluding shares held in treasury is
409,139,997. The above figure of 409,139,997 Ordinary Shares 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 Guidance and Transparency
Rules.
Andrew Riley, Chief Executive of Idox, commented:
"The acquisition of Halarose, which has a strong product
offering, team and track record, presents Idox with the opportunity
to significantly expand its existing presence in the elections
market. It is expected to be earnings enhancing in the first full
year of ownership and supports our strategy of focusing on and
investing in the wider public sector in the UK and abroad."
MAR
This announcement is released by Idox plc and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 ("MAR"), encompassing information relating
to the Acquisition described herein, and is disclosed in accordance
with the Company's obligations under Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Jane Mackie, Chief Financial Officer.
-ends-
Enquiries:
+44 (0) 870 333
IDOX plc 7101
Andrew Riley, Chief Executive
Officer
Jane Mackie, Chief Financial
Officer
+44 (0) 20 7496
N+1 Singer (NOMAD and Broker) 3000
Shaun Dobson / Liz Yong
+44 (0) 20 3128
MHP Communications 8100
Reg Hoare / Andrew Leach
/ Charlie Baker idox@mhpc.com
About Idox plc
Idox plc is a supplier of specialist information management
solutions to the public sector and to highly regulated asset
intensive industries around the world in the wider corporate
sector.
Idox is the leading applications provider to UK local government
for core functions relating to land, people and property, such as
its market leading planning systems and election management
software. Over 90% of UK local authorities are now customers. Idox
provides public sector organisations with tools to manage
information and knowledge, documents, content, business processes
and workflow as well as connecting directly with the citizen via
the web, and providing elections management solutions. It also
supplies in the UK and internationally, decision support content
such as grants and planning policy information and corporates
compliance services. Idox delivers engineering document control,
project collaboration and facility management applications to many
leading companies in industries such as oil & gas, architecture
and construction, mining, utilities, pharmaceuticals and
transportation in North America and around the world.
The Group employs approximately 900 staff located in the UK,
North America, Europe, India and Australia.
For more information see www.idoxplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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