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TOP NEWS: IMImobile Accepts Cisco Offer Terms; Posts Sharp Profit Rise

Mon, 07th Dec 2020 09:13

(Alliance News) - Cisco Systems Inc on Monday said IMImobile PLC has agreed to a takeover offer that values the AIM-listed cloud communications software firm at GBP543 million.

Cisco Systems Holdings UK Ltd, a subsidiary of US networking equipment maker Cisco Systems Inc, is to pay 595 pence per share for IMImobile, valuing IMImobile's entire share capital at around GBP545 million on a fully diluted basis.

Shares in IMImobile were up 47% at 592.00p in London on Monday morning, having closed at 404.00p on Friday.

Cisco has already received irrevocable undertakings to vote in favour of the deal in respect of 25.8 million IMImobile shares, representing approximately 31.3% of IMImobile's share capital. These are from 18.7% shareholder Liontrust and from IMImobile directors holding an approximately 12.6% stake.

Non-binding letters of intent have also been received from Hargreave Hale and Octopus Investments, holding in aggregate a 23.2% stake or 19.1 million shares.

Therefore, Cisco so far has irrevocable undertakings or letters of intent in respect of 44.9 million IMImobile shares, representing a controlling 54.5% stake.

IMImobile Non-Executive Chair John Allwood said: "We recognise that our strategic ambitions are closely aligned with Cisco, as we both seek to make every interaction matter and transform customer experience for our clients and brands across the world. Cisco has committed to supporting our current growth plans and we look forward to pursuing these plans with the benefit of being part of one of the world's leading technology companies.

"In recommending this offer to the IMImobile shareholders, the independent directors of IMImobile believe it is in the best interests of all stakeholders in IMImobile, enabling them to realise significant and immediate value, whilst enabling the long term success of the business."

IMImobile also reported its interim results, showing a steep profit rise to GBP3.5 million in the six months ended September 30 from GBP1.3 million a year before.

Revenue fell 8.6% to GBP75.9 million from GBP83.0 million, but cost of sales fell by a much-sharper 23% to GBP36.9 million from GBP47.8 million, which meant a higher gross profit of GBP39.0 million versus GBP35.2 million the prior year.

IMImobile said outlook for its current financial year, ending in March 2021, is still in line with board expectations.

Its financial 2022 performance is expected to be "materially ahead" of prior expectations due to: "Increasing momentum from digital transformation trends, the full year impact of deployments this year combined with new client wins in the North American market and an exciting pipeline of opportunities."

Jay Patel, IMImobile's chief executive, said: "We are very pleased with the resilience of the business during the past six months, despite the current external circumstances. This resilience is testament to our staff, technologies, and the mission-critical nature of the interactions we deliver for our clients. Continued growth has been driven by strategic execution against our objective to enter the North American market. We are particularly pleased with progress in new logo acquisition in the US and in Europe. The board remains confident for the future and that the group is well positioned for an acceleration of growth."

By Anna Farley; annafarley@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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