eg Solutions PLC Regulatory News (EGS)

ACQUISITION OF XTAQ

eg solutions plc ("eg solutions", "eg" or "the Company"; LSE-AIM: EGS), the back office optimisation software company, is pleased to announce the acquisition of XTAQ Limited ("XTAQ"), a developer and supplier of business performance measurement software and associated services, for a consideration of up to £233,333, further details of which are set out below.

Founded in 1993 XTAQ is a privately owned business based in Bristol employing eight people. XTAQ has developed its Nuqleus business performance measurement software which it distributes with support services to deliver improved operational performance and effectiveness. Customers deploy Nuqleus strategically throughout the enterprise or as a point solution to address particular operational management information requirements. XTAQ is currently deploying the latest version of its software product, Nuqleus 3D, and has created long-term relationships with its customers which, typically, use Nuqleus within processing centres, call centres and mobile professional workforces. XTAQ's current customers include Aegon, Barclaycard, Citibank, GE Capital, Principality Building Society and Royal Bank of Scotland as well as a number of public sector clients.

In the year to 31 March 2009 XTAQ's audited turnover was £0.55 million, on which it incurred a loss before tax of £0.15 million. As at the same date XTAQ had a deficit on net assets of (£0.05m).

The consideration payable by the Company for XTAQ comprises: £33,333 in cash and the balance by the issue of up to £150,000 in 5 per cent Convertible Unsecured Loan Notes 2012 ("Loan Notes"), and up to 90,909 new ordinary shares of 1p each in the Company ("New Ordinary Shares"). The total maximum consideration equates to the approximate level of current contracted maintenance revenues for the 12 months ending 31 March 2011. The consideration will be adjusted on a £-for-£ basis for any actual increase in the deficit on net assets which has been estimated by XTAQ as at 28 February 2010. On the second anniversary of their issue the Loan Notes are repayable or convertible into New Ordinary Shares at a share price of 82.5p. The Company may require holders to convert if, for at least 20 consecutive business days, the average share price of an ordinary share in the Company shall be 82.5p. No premises or property lease liabilities are being acquired.

Following completion of the acquisition of XTAQ its employees will be granted an aggregate of up to 1,393,938 options to subscribe for new ordinary shares in the Company, at an exercise price of 55p, the closing mid-market price of an ordinary share in the Company on 10 March 2010, being the last business day prior to the acquisition. The number of options that may be exercised will depend, on a sliding scale, on the achievement of pre-determined XTAQ revenue performance in the 12 months ending 31 March 2011 and are subject to a 4 year vesting period from the date of issue.

The Board considers that the acquisition of XTAQ brings together two companies with complementary products and customer bases. XTAQ's Nuqleus 3D product provides real-time data capture and additional dashboard functionality that the Company had been planning to develop for its own product range during 2010. The combined businesses' active client base will increase to about 40 from 25 for eg, providing increased recurring revenues and opportunities for cross-selling. In addition, XTAQ's sales, development and implementation staff will strengthen the Company's existing team.

Elizabeth Gooch, Chief Executive Officer, commented:

"We believe that the acquisition of XTAQ is an excellent 'bolt on' to eg. It strengthens our position in the back office optimisation market, extends our product range, expands our customer base and adds to our recurring revenues. Furthermore, we consider that the sales prospects for Nuqleus 3D will be significantly improved by XTAQ being part of a larger and stronger business."

Application will be made for the New Ordinary Shares to be admitted to trading on AIM once the final consideration and the number of shares to be issued has been determined.

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About eg solutions plc

eg solutions plc is a global back office optimisation software company. Our software provides historic, real-time and predictive Operational MI. When implemented with our training programme for managers and team leaders to use this intelligence, we guarantee improvements in operational results in short timescales.

The Company, which is listed on the Alternative Investment Market ('AIM') of the London Stock Exchange, is committed to customer satisfaction and the ongoing development of its operations management solutions.