Atlantic Lithium Regulatory News (ALL)

ALLOCATE SOFTWARE PLC

("Allocate" or "the Company")

Acquisition of Zircadian

Allocate Software, (AIM:ALL), the leading provider of workforce and compliance optimisation solutions has acquired Zircadian Holdings Limited ("Zircadian" or the "Company"), the UK based SaaS provider of software used to plan the rotas of junior doctors and consultants in the NHS, for a total consideration of up to £7.0 million. The total consideration includes a deferred payment of £1.0 million contingent on financial targets and £0.5 million contingent on key staff retentions. Zircadian had net cash of approximately £1.0 million at 31 July 2011.

Overview of Zircadian and the Acquisition

§ Zircadian is a leading UK supplier of software to plan the rotas of junior doctors and consultants in the 

NHS. The business uses a SaaS delivery model and most contracts are multiple year agreements

§ Its products are used by 142 healthcare organisations in the UK

§ Functionality is complementary to Allocate's existing nurse rostering software, HealthRoster

§ In the year ended 31 March 2011, unaudited management accounts reported c.£3.0m in billings, c.£2.5

million in recognised revenues and approximately £0.2 million in EBITDA.

§ Zircadian employs 43 staff who are based in Wimbledon, London

§ The total consideration of £7.0 million is structured as an initial payment of £5.5 million and two further

payments totalling £1.5 million, subject to certain conditions (described below)

§ The acquisition is expected by the Directors to be earnings enhancing in the first full financial year of

ownership by Allocate

Ian Bowles, CEO of Allocate commented: "We are delighted to conclude our sixth acquisition, one which complements our HealthRoster application well, thereby significantly enhancing the product portfolio and value that we can bring to our customer base both within the NHS and elsewhere. The alignment of Zircadian's products with Allocate's reinforces the benefits of our focused M&A strategy in which we aim to continue to build a significant healthcare applications company. I welcome the Zircadian team to Allocate and look forward to further building on our existing relationships within our mutual customer base."

Commenting on the acquisition, Dr Henry Carleton, Director of Zircadian said: "I am proud of what the team at Zircadian has achieved in developing and growing the business over the past eleven year and we are delighted to join forces with Allocate, the market leader in its field. The integration of our application into the broader HealthRoster application Suite is a natural step, and one which provides the combined groups customers with a highly complementary product offering."

Zircadian

Zircadian was founded in 2000 by Dr Henry Carleton and Dr Angus MacDougall and since then has expanded and diversified to become the leading SaaS provider of software to plan the rotas and job plans of junior doctors and consultants respectively in the NHS.

These solutions are delivered principally through two applications:

§ Junior Doctor Portal - rota management software "e-Rota", online diary management systems "e-Monitor" 

and "e-Locum" for managing temporary (locum) staff; and

§ Consultant Portal - job planning "e-JobPlan", annual leave "e-Leave" and appraisal management "e-

Appraisal".

Consideration

The total consideration of £7.0 million is structured as an initial payment of £5.5 million and two further payments totalling £1.5 million:

§ £0.5 million payable based upon the Directors remaining with Allocate for a period of at least six months

from completion; and

§ £1.0 million payable upon the achievement of certain future financial targets.

The purchase will be funded from existing cash resources and debt. The debt will take the form of an increase in the company's existing revolving credit facility by an amount of £2.0 million. The balance of the initial payment of approximately £3.5 million will be funded from existing cash resources while any future payments will be funded from cash generated by the enlarged group.

Customer Base and Technology

As at 31 July 2011, Zircadian had 142 healthcare customers in the UK, comprising 107 NHS Trusts using the Junior Doctor Portal and 68 using Consultant Portal.

Zircadian's technology has been built using a Microsoft .NET platform and Microsoft SQL Server database - consistent with Allocate's own technology. Zircadian's products are deployed in a fully multi-tenant, hosted SaaS environment.

Management of Zircadian

Dr Henry Carleton and Dr Angus MacDougall, the two founders of Zircadian, will join the senior management team of Allocate. 

Acquisition Rationale

The acquisition of Zircadian is consistent with the strategy set by Allocate to expand its breadth of healthcare applications with a focus on helping customers to drive operational efficiencies and deliver cost savings.

The acquisition is expected by the Directors to be earnings enhancing in the first full financial year of ownership by Allocate. Furthermore, the Board believes that the subscription nature of Zircadian's business model, with high levels of recurring revenue, will enhance revenue visibility.

The Board believes that there continues to be significant potential for organic growth within the UK healthcare market which will be enhanced by this acquisition and the opportunity to generate incremental revenues from cross-selling, building on the existing customer base of both businesses despite the recent Government changes to the NHS.

Enquiries:

About Allocate Software plc

Allocate Software plc is the leading workforce and compliance optimisation software applications provider for world-wide organisations with large, multi-skilled workforces. With a blue chip client base spanning the public and private sector, its key vertical markets include: Healthcare and Defence. At the core of the business is Allocate's workforce optimisation software, which organisations use to deploy the right people with the right skills, to the right place at the right time. Headquartered in London, Allocate provides services and support to its increasing international customer base through regional offices in the UK, Sweden, USA, Australia and Malaysia.

Allocate is quoted on the London Stock Exchange (AIM: ALL). For further information please visit www.allocatesoftware.com.