Aptitude Regulatory News (APTD)

microgen

www.microgen.com 31 August 2017

ACQUISITION OF REVSTREAM INC.

Microgen plc ('Microgen') is pleased to announce the acquisition of RevStream Inc. ('RevStream'), a California-based provider of revenue management enterprise software. The acquisition broadens and complements the specialist capabilities within Microgen's Aptitude Software business ('Aptitude') and provides access to RevStream's growing client base in the technology sector.

RevStream will be integrated into Aptitude which already has an established office in Boston and a strong North American presence with over 50% of H1 2017 Aptitude revenues generated in the US and Canada.

Since 2015 Aptitude has established a market leading position in the telecommunications sector with the Aptitude Revenue Recognition Engine ('ARRE'), an application which enables organisations to address the requirements of IFRS 15 and ASC 606. ARRE has established this strong position as a result of its capability to process very rapidly a very high volume of complex, business event-driven transactions and calculations. The acquisition of RevStream enables Aptitude to offer broader revenue management functionality which augments the specialised capabilities of ARRE.

RevStream's growing client base, primarily focussed on the technology sector, complements Aptitude's strong presence within the financial services, insurance and telecommunications sectors and provides cross-selling opportunities for both organisations' products. In addition, RevStream's existing cloud capabilities will be leveraged across Aptitude's new applications where cloud deployment is appropriate.

Consideration for the entire issued and to be issued shares of RevStream is £9.7 million. In addition, at completion RevStream had debt and debt-like items of £2.5 million which Microgen will settle under its ownership. Of the consideration of £9.7 million, £7.7 million is expected to be payable in cash of which approximately 70% was paid on completion with the remaining 30% payable across the following two-year period. The initial cash consideration was satisfied using Microgen's existing cash resources. The consideration of £9.7 million also includes 421,582 Microgen shares (valued at £2.0 million as at 30 August 2017) which will be issued in August 2019. The founder, CEO and former majority shareholder of RevStream, Rajiv Chopra, will remain with the business.

RevStream has experienced a significant increase in demand for its products and services in 2017. RevStream's on-going recurring revenue base is currently £2.9 million, an increase of 58% since 31 December 2016, with a number of further opportunities well progressed. RevStream's revenue in the year ended 31 December 2016 was £2.7 million; this is expected to more than double in 2017. RevStream reported a loss before tax in 2016 of £0.8 million. The gross assets at 31 December 2016 were £0.9 million. The acquisition of RevStream is anticipated to be earnings enhancing in 2018.

Contacts

Philip Wood, Chief Financial Officer 020-7496-8100

James Melville-Ross / Darius Alexander 020-3727-1000

FTI Consulting