Eckoh Technologies Regulatory News (ECK)

Eckoh plc

("Eckoh" or the "Company")

Acquisition of Klick2Contact EU Ltd

Eckoh (AIM: ECK), the global provider of secure payment products and customer contact solutions, is pleased to announce that it has acquired Klick2Contact EU Ltd ("K2C"), which specialises in live web help and Omni-channel customer engagement services, for an initial consideration of £2.35 million payable in a mixture of cash and shares. Including a potential deferred consideration of up to a maximum of £5.65 million in the next two years, which is subject to challenging EBITDA targets, the total consideration could amount to up to £8.0 million.

The initial consideration comprises £2.0 million payable in cash funded from an additional loan facility, together with £350,000 funded by the issue of new Eckoh ordinary shares. An additional earn-out of up to a maximum of £5.65 million is also payable over the next two years, in equal proportions of cash and shares, and dependent on the achievement of certain EBITDA targets. No deferred consideration shall be paid unless a minimum of £1.0 million of EBITDA is generated in the 24 month period following completion. To earn the entire deferred consideration, an EBITDA target of £2.0 million must be achieved over the same period. Application will be made shortly to the London Stock Exchange for the 678,733 new ordinary shares to be admitted to trading on AIM and trading is expected to commence on or around 27 July 2016.

Founded in 2011, by the current CEO Graham Pollard, K2C represents an attractive acquisition for Eckoh, bringing significant expertise in complementary customer contact services. The K2C suite of live help and customer engagement services consists of Web Chat, Instant Call-Back, Knowledge Base, Social Media Monitoring and Engagement, Full Workflow and Email Management, all of which are offered in real time. K2C's solutions are also cloud-based, enabling a fast, secure and simple implementation process, similar to Eckoh's existing product set. K2C has an established client base in 15 countries internationally, with clients including Next, BMW, Topshop, Studio Moderna, Volkswagen, Delimano, Hayes Garden World and UKMail. Its partners include Teleperformance and Capita.

For the 12 months ended 31 December 2015, K2C delivered unaudited revenues of £881,000 (2014: £798,000) and EBITDA of £219,000 (2014: £104,000). As at 31 May 2015, net assets of K2C were £768,000. The transaction is expected to be immediately earnings enhancing.

The two companies have already begun working together in recent months, responding to the increasing levels of interest from clients in the live assist services provided by K2C. The acquisition is therefore a logical next step in the relationship and corresponds with Eckoh's strategy to own and control as many of the touchpoints through which a consumer can engage with, and make payments to, an enterprise. CEO of K2C, Graham Pollard, and his staff will remain with the business to support the continued growth of the business as part of the Group, including the exciting opportunity for the companies to cross-sell into each other's client bases and through partner relationships.

Following admission of the new ordinary shares to be issued in connection with the acquisition, the Company will have a total of 239,405,900 ordinary shares in issue each carrying one voting right. The Company does not hold any ordinary shares in treasury. This figure of 239,405,900 ordinary shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.

Nik Philpot, Chief Executive Officer of Eckoh, commented:

"We have a focused acquisition strategy, looking to find proven, profitable and growing businesses which bring us complementary technologies or reach. The acquisition of Klick2Connect is absolutely in line with these criteria and we are extremely pleased to be adding its excellent product set, expertise and clients to Eckoh's portfolio.

There is growing demand for a truly Omni-channel customer contact offering, ideally delivered by a single supplier, and by combining K2C into Eckoh's proposition we are well placed to help satisfy this demand. We are excited about the opportunities to cross-sell the K2C products into our existing clients and to use the combined offering to assist us in identifying and securing new clients."

Graham Pollard, CEO of K2C, said:

"We are thrilled to be joining forces with Eckoh and to be able to provide a truly Omni-channel offering for customer engagement. Having worked with the Eckoh team over the past few months, it is clear that their market-leading customer contact and secure payment solutions together with our cutting-edge live help and customer engagement services creates a winning combination, enabling us to take advantage of the growing demand in this area."

For more information, please contact:

Eckoh plc Tel: 01442 458 300

Nik Philpot, Chief Executive Officer

Adam Moloney, Group Finance Director

www.eckoh.com 

Buchanan

Sophie McNulty, Stephanie Watson Tel: 020 7466 5000

www.buchanan.uk.com

N+1 Singer (Nomad & Joint Broker)

Shaun Dobson, Lauren Kettle Tel: 020 7496 3000

www.n1singer.com

Berenberg (Joint Broker)

Ben Wright, Chris Bowman, Amritha Murali Tel: 020 3207 7800

www.berenberg.de/en

About Eckoh plc

Eckoh is a global provider of secure payment products and customer contact solutions, supporting an international client base from its offices in the UK, US and Australia.

Our Haloh Suite of secure payments products, which can be hosted in the Cloud or deployed on the client's site, removes sensitive personal and payment data from contact centres and IT environments. The products offer merchants a simple and effective way to reduce the risk of fraud, secure sensitive data and become compliant with the Payment Card Industry Data Security Standards ("PCI DSS") and wider data security regulations. Eckoh has been a PCI DSS Level One accredited Service Provider since 2010, processing over $1 billion in card payments annually. 

Eckoh's customer contact solutions enable enquiries and transactions to be performed on whatever device the customer chooses, allowing organisations to increase efficiency, lower operational costs and provide a true Omni-channel experience. We also assist organisations in transforming the way that they engage with their customers by providing support and transition services as they implement our innovative customer contact solutions.

Our large portfolio of clients come from a broad range of vertical markets and includes government departments, telecoms providers, retailers, utility providers and financial services organisations.

For more information go to www.eckoh.com