LONDON (Alliance News) - Surveillance, security and safety video services provider Digital Barriers PLC on Friday said it has struck a deal worth up to GBP29.4 million to acquire US surveillance services company Brimtek Inc, to be backed by a share issue, as its interim pretax loss narrowed significantly.
The company said it would buy Brimtek, which provides surveillance systems to the US defence, homeland security, federal law enforcement and intelligence markets, for a total of GBP29.6 million, with GBP16.4 million payable in cash upon completion and another GBP13.2 million to be paid based on Brimtek hitting targets through to the end of 2017. The second tranche of the consideration may be made up of cash and shares as Digital Barriers' discretion.
Digital Barriers said the deal backs its push into the US market and said acquiring Brimtek will offer a number of significant sales synergies for the company in the US.
To finance the deal, Digital Barriers will raise GBP25.8 million through a fully-underwritten placing of 80.6 million shares at 35.00 pence per share. The significant discount to its current share price sent Digital Barriers shares lower on Friday morning, down 26% to 38.00 pence and one of the worst performers in the AIM All-Share.
The acquisition came as Digital Barriers said its pretax loss for the half to the end of September narrowed to GBP5.8 million, compared to GBP13.2 million a year earlier, despite revenue falling to GBP7.9 million from GBP10.1 million and mainly due to lower administrative costs.
The revenue decline was down to exceptional revenue made in 2014 from the group's work on a major event, which is did not specify, which dragged on its services sales. Stripping that out, underlying services revenue rose 22% in the half, while international revenue increased 38% thanks to a strong performance in Asia Pacific.
Digital Barriers said it expects further strong underlying trading in its services arm through the balance of the financial year and expects be operationally breakeven or better in the second half.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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