Marlowe acquires Core Stream in £18m deal

(Sharecast News) - Business-critical software and services company Marlowe has acquired governance, risk and compliance software-as-a-service (SaaS) platform Core Stream, it announced on Monday, for an implied enterprise value of £18m.
The AIM-traded firm said Core Stream, founded in 2006 and based in London, supports large organisations with corporate compliance and risk management needs.

It described it as a "leader" in the UK's governance, risk and compliance (GRC) software market, which was experiencing "significant" growth driven by client demands for improved governance and risk management to address their increasing exposure to new and expanding regulation.

The acquisition would broaden Marlowe's digital and environmental, social and governance (ESG) service offerings, the board said, and would further deepen its relationships with "leading" blue-chip organisations.

It would also provide "strong" cross-selling opportunities across its existing software and service portfolio, and expand its base of SaaS subscription revenues.

In the year ended 31 March, Core Stream generated adjusted EBITDA of £1.5m on revenues of £4.1m, with organic revenue compound annualised growth rate from 2019 to 2021 standing at over 30%.

The implied enterprise value included initial cash and deferred consideration of £11m, and a performance=based earn-out expected to be in the region of £7m.

"The acquisition of Core Stream strengthens Marlowe's position in the UK's rapidly-growing governance, risk and compliance software market," said Marlowe chief executive officer Alex Dacre.

"In combination with our existing compliance software products, Core Stream's platform enables us to offer our clients a complete GRC risk management solution to improve corporate governance and control, reduce risk and enhance compliance."

Dacre said it would also strengthen its ability to support clients on their ESG objectives.

"We continue to make good progress on our digital strategy of growing Marlowe's compliance software revenues and this acquisition marks an important milestone in that journey, increasing our base of SaaS subscription revenues, offering greater cross-selling opportunities, and improving our position for the long-term in this important and attractive market."

At 1015 BST, shares in Marlowe were up 0.62% at 889.5p.