GB Group buys NZ firm Cloudcheck for initial £10m

(Sharecast News) - Location, identity and fraud prevention software company GB Group announced the acquisition of New Zealand-based identity verification and anti-money laundering technology company Cloudcheck on Tuesday, for an upfront consideration of NZD 20m (£9.81m).
The AIM-traded firm said that would comprise NZD 12m in cash, and the issue of NZD 8m of GB Group shares, based on a 30-day volume weighted average share price equal to around £4m, or 580,768 shares.

Contingent on Cloudcheck's revenue growth, a payment of up to NZD 4m in cash could become payable following the completion of audited accounts for the year ending 31 March 2023.

Additionally, contingent on Cloudcheck's revenue growth, up to NZD 4m in cash could become payable based on audited accounts for the following 2024 financial year.

GB Group said Cloudcheck, founded in 2012, is a "leading provider" of electronic identity verification and anti-money laundering products in New Zealand.

Its software-as-a-service (SaaS) revenue model was based on an annual subscription fee, plus volume-based usage fee.

The company said the acquisition would provide customer upsell opportunities for GB Group's global identity data and adjacent compliance and fraud solutions.

In the year ending 31 March, Cloudcheck was expected to generate about NZD 5m in revenue, and NZD 2m in EBITDA.

Before synergies, the acquisition was expected to be immediately enhancing to GB Group's overall revenue growth rate, operating margins and earnings per share.

"We are delighted with the acquisition of Cloudcheck - it has established a market leadership position in New Zealand's electronic identity verification market by closely understanding local customer needs and delivering a strong technology-led solution," said chief executive officer Chris Clark.

"This acquisition follows GB Group's proven model for global identity services - combining our internationally-sourced data and expertise with locally relevant capability."

Clark said the Cloudcheck platform would be able to consume GB Group's international data, and create an opportunity for New Zealand customers to benefit from the firm's other identity and anti-fraud services.

"Cloudcheck will also complement GB Group's successful approach to its identity strategy in Australasia - providing experienced local presence and best-of-breed domestic product to our customers."

At 1231 GMT, shares in GB Group were up 3.35% at 679p.