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(Alliance News) - IT security company NCC Group PLC on Thursday said it has agreed to buy the intellectual property management business of Iron Mountain Inc for USD220 million in cash, partly funded by a share issue.
The transaction comprises substantially all of the assets of Iron Mountain Intellectual Property Management Inc, together with some other assets of affiliates of Iron Mountain. Iron Mountain Intellectual Property reported revenue of USD32.9 million and earnings before interest, tax, depreciation and amortization of USD21.6 million for 2020.
The proposed transaction is expected to provide NCC with a number of financial benefits, it noted, as well as a greater global presence.
"This acquisition will transform NCC Group's Software Resilience business, making it a market leader, and deliver immediate financial and operational benefits to the whole of the group," said Chief Executive Adam Palser.
NCC said the consideration and all related transaction costs will be funded through a combination of USD99 million gross proceeds of the share placing, USD70 million from a new three-year term facility agreement, existing cash balances of USD10 million, and the balance from the company's existing revolving credit facility agreement.
Upon completion of the placing, the company had raised USD102.3 million, through the issue of 27.9 million shares at a price of 260p each, which represents a 3.4% discount to the prevailing middle market price at the time of agreeing the placing.
NCC shares were trading 11% higher in London on Thursday at 283.00 pence each, giving it a market capitalisation of just under GBP790 million.
Following the fundraising, NCC will have 308.9 million shares overall, giving a market cap of GBP874.2 million at the current market price.
In addition, NCC reaffirmed its current expectation that pre-IFRS 16 adjusted earnings before interest and tax for the financial year ending May 31 will be no less than market consensus of GBP33 million.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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