Netcall Regulatory News (NET)

16 September 2024

NETCALL PLC

("Netcall", the "Company" or the "Group")

Acquisition of Parble

Bringing complementary automation capabilities to Liberty

Netcall plc (AIM: NET), a leading provider of intelligent automation and customer engagement software, is pleased to announce the acquisition of Smart & Easy NV(1) (trading as "Parble"), a provider of intelligent document processing software (the "Acquisition").

Highlights:

About Parble

Based in Brussels, Belgium, Parble (www.parble.com) provides a cloud-native, GenAI-powered document processing solution that automates data extraction and classification of structured, semi-structured and unstructured data from a variety of document formats. This technology helps businesses digitise their processes, such as claims handling, and make insight-driven decisions, particularly valuable for organisations handling high volumes of complex documentation, where efficiency, compliance and accuracy are paramount. Parble has processed over 58 million documents to date, achieving time savings of approximately 97% for its customers. Parble has an established footprint in the insurance and banking sector, with customers including Generali, Baloise and Vanbreda Risk & Benefits. The Group's three founders and six employees will remain with Netcall and continue to be based in Belgium.

For the financial year ended 31 December 2023, Parble reported a 30% increase in revenue to €1.48 million (2022: €1.14 million), adjusted EBITDA(2) of €0.48 million (2022: adjusted EBITDA loss of €0.06 million), and a profit before tax of €0.17 million (2022: loss before tax of €0.21 million). Annual recurring revenue grew 34% to €1.19 million (2022: €0.89 million). Gross assets as of 31 December 2023 were €1.9 million (2022: €2.0 million). All figures are unaudited.

Acquisition Rationale

The acquisition of Parble is expected to be immediately earnings enhancing with regard to adjusted earnings per share, providing Netcall with specialised intelligent business processing technology that can be rapidly integrated into the Liberty platform. Parble's easy-to-use and intuitive design enhances the Liberty offering, providing a more comprehensive, end-to-end solution for business process automation, from data capture to customer engagement. This acquisition provides increased competitive differentiation and substantial two-way cross-selling opportunities with an increased value proposition across the Group's enlarged customer base. Additionally, it provides strategic benefits such as geographic expansion into Europe and an increased presence in the highly regulated insurance sector.

Consideration for the Acquisition

The total consideration for the Acquisition is up to €8.7 million, plus the assumption of €1.1m net debt. The initial consideration is €4.7 million, with €4.1 million payable upon completion and €0.6 million deferred for 12 months. An additional €4.0 million of contingent consideration is payable if Parble achieves an Annual Recurring Revenue ("ARR") growth target from €1.5 million at the time of Acquisition to €3.3 million within three years of completion. Payments relating to ARR will be measured annually and paid equally in cash and Netcall shares, with a 12-month lock-in for Parble's management shareholders. The net debt assumed comprises loan notes of €1.6 million offset by cash of €0.5 million. The loan notes were repaid in full immediately on completion. Both the initial consideration and debt repayment were funded from Netcall's existing cash resources.

James Ormondroyd, Chief Executive of Netcall, commented: "Parble is a valuable addition to the Liberty portfolio, enhancing our digital transformation capabilities and providing two-way cross-selling opportunities. We are delighted to welcome the Parble team and benefit from their expertise, and we look forward to working together to improve our customers' operational efficiency."

(1) Smart and Easy NV, trading as Parble and Contract.fit, was owned by its management team, Pol Brouckaert, Bertrand Anckaert and Jens De Pelsmaeker, who collectively held 82.6% of the company. The remaining 17.4% was owned by Pamcia NV.

(2) Profit before interest, tax, depreciation and amortisation adjusted to exclude the effects of share-based payments, acquisition, impairment, profit or loss on disposals, contingent consideration and non-recurring transaction costs.

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About Netcall

Netcall's Liberty software platform with Intelligent Automation and Customer Engagement solutions helps organisations digitally transform their businesses faster and more efficiently, empowering them to create a leaner, more customer-centric organisation.

Netcall's customers span enterprise, healthcare and government sectors. These include two-thirds of the NHS Acute Health Trusts and leading corporates including Legal and General, Lloyds Banking Group, Aon and Santander.

For further information, please go to www.netcall.com.

Prior to publication the information communicated in this announcement was deemed by the Company to constitute inside information for the purposes of article 7 of the Market Abuse Regulations (EU) No 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR'). With the publication of this announcement, this information is now considered to be in the public domain.