Progility Regulatory News (PGY)

5 December 2012

ILX Group plc

('ILX', the 'Group' or the 'Company')

Acquisition of Obrar Limited

ILX Group plc (AIM: ILX), the AIM quoted provider of e-learning software and business training, is pleased to announce the acquisition of Obrar Limited ("Obrar"), a consulting and project management services company ("the Acquisition"), in line with the Company's recently stated objectives.

Obrar helps corporate clients achieve improvements in strategy, processes, sales, efficiency, technology design and deliveries and overall business performance. It works with its clients to implement practical, highly effective measures to enhance the 'end-to-end customer experience', typically focusing on multi-media contact centres, corporate technology infrastructures and operational change associated with major programme deliveries. Obrar has managed and implemented some of the largest contact centre technical and operational deliveries across Europe and has extensive experience in contact centre outsourcing deliveries on a global basis.

Established in 2010, Obrar has grown strongly. Among its clients are leading companies in telecommunications, retail, printing and management information, television, broadband internet, banking and insurance; travel and transport; utilities and outsourcing. They include T-Mobile, Orange, Barclays, Direct Line Group, Hawksford International, Firstsource, Vodafone Group, Dunedin Venture Capital, RR Donnelley, Genesys, Meteor, du Telecom, Semaphone and City Sprint.

Obrar will establish ILX's new corporate consulting division to work with many of the current corporate customers that currently use our project management and ITIL training internally. The potential growth in this direction is complementary with the current strategy for growth in training, services and technology.

For the year ended 31 March 2012, Obrar generated revenues of £1.6 million and profit before tax of £0.28 million. Net assets as at 31 March 2012 were £0.32 million.

The maximum consideration payable for the Acquisition will be £1 million, plus working capital comprising an upfront payment and earn-out to 31 March 2015.

The upfront payment for the Acquisition is £0.35 million. A further payment of up to a maximum of £0.42 million will be payable on anticipated net assets of £0.48 million as at completion. A first earn-out payment of up to £0.3 million will be made upon Obrar reaching a profit before tax target of £0.6 million for the year ended 31 March 2014. A second and final earn-out payment of up to £0.35 million will be made upon Obrar reaching a profit before tax target of £0.725 million for the year ended 31 March 2015.

David Hopkins, Managing Director of Obrar, will remain with the Company following completion of the Acquisition.

Wayne Bos, Executive Chairman of ILX Group plc, said: "We know the Obrar Managing Director David Hopkins and his team well, having been in contact and watching their growth and progress over several years. We see major opportunities for combining the proven consulting and project management skills of Obrar with our own. Additionally, we envisage prospects for introducing ILX training products to the sort of organisations Obrar has served so well over the years, and vice versa."

"Our team looks forward to adding ILX learning solutions and technology platform to our offering," added David Hopkins, who will remain with ILX as managing director of Obrar. "Having built the Obrar business to the stage where it is, we are now ready to take it forward strongly as part of a public company, and taking advantage of the added scale that ILX provides will increase our current client deliveries and capabilities. The Obrar team will also see their skills broaden, with increased business delivery and client opportunities."

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