3 Feb 2016 07:00
Date: | 3 February 2016 |
On behalf of: | PROACTIS Holdings PLC ("PROACTIS" the "Company" or "the Group") |
Embargoed until: | 0700hrs |
PROACTIS Holdings PLC
Acquisition of Due North Limited
PROACTIS Holdings PLC, the specialist Spend Control software provider, is pleased to announce that it has acquired the entire issued share capital of Due North Limited ("Due North"), a well-respected provider of eProcurement solutions from its parent company, Access Intelligence PLC (AIM: ACC), for a gross cash consideration of £4.5 million ("the Acquisition").
Highlights
The Acquisition enhances the Group's position as a leading provider of eProcurement systems to the UK market, now serving over 800 clients (300 new clients from the Acquisition)The Acquisition is expected to be immediately earnings enhancing and is financed from non-dilutive capitalAnnual recurring revenue from Due North is approximately £1.6 million through its 3-4 year contracted subscription business model Substantial cross-selling opportunities from PROACTIS' wider portfolio of solutions The Acquisition increases the Group's scale and operational synergies are expected to further enhance Group profitability
Details of the Acquisition
The Acquisition is in line with the Company's strategy of augmenting its organic growth with selective acquisitions.
Due North is a well-respected provider of eProcurement systems, with more than 300 clients principally in the UK Public sector. Its clients use Due North's hosted software to control an estimated £100 billion of spend through approximately 200,000 active suppliers by approximately 20,000 procurement professionals.
Due North's expertise in the UK Public sector is complementary to PROACTIS' business and the combination offers the opportunity for Due North's clients to access the broader solutions offered by PROACTIS, as well as substantial operational synergies in the short and medium term. The Acquisition is expected to be immediately earnings enhancing.
For the audited year ended 30 November 2014, Due North reported revenue of £2.0m on which it made an operating profit (before depreciation and amortisation) of £0.5m and its reported net assets were £2.3m. For the financial year ended 30 November 2015, Due North's unaudited management accounts report a revenue contribution of £1.8 million with EBITDA of £0.4 million and profit before tax of £0.2 million. The total value of the net assets being disposed of as at 30 November 2015 was approximately £2.5 million.
Further information on the Acquisition and new banking facilities
The gross cash consideration payable at completion is £4.5 million which the Group will fund through a combination of bank debt and its own cash resources. The bank debt will be provided by HSBC Bank plc, by way of a term loan of £3.0 million repayable over four years at an interest rate of 1.85% per annum over LIBOR.
Rod Jones, CEO of PROACTIS, commented:
"I am delighted to announce the acquisition of Due North which is an excellent strategic fit - consolidating the Group's position as the largest independent eProcurement solution provider in the UK market. Due North's market penetration is substantial and should immediately benefit the wider PROACTIS business. I look forward to working with the team at Due North to grow the business and provide the wider client base with our end to end solutions."
Enquiries:
PROACTIS Holdings PLC |
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Rod Jones, Chief Executive Officer Tim Sykes, Chief Financial Officer
| Via Redleaf Communications
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Redleaf Communications |
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Rebecca Sanders-Hewett Sarah Fabietti Harriet Lynch | 0207 382 4730 |
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finnCap Limited Stuart Andrews Carl Holmes
| 0207 220 0500
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Notes to Editors:
PROACTIS creates, sells and maintains specialist software which enables organisations to streamline, control and monitor all internal and external expenditure, other than payroll. PROACTIS' solutions are used in over 800 organisations around the world from the commercial, public and not-for-profit sectors. It is the largest independent eProcurement solution provider to the UK Public Sector.
PROACTIS is head quartered in Wetherby, West Yorkshire. It develops its own software using an in-house team of developers and sells through both direct and indirect channels via a number of Accredited Channel Partners.
PROACTIS floated on the AIM market of the London Stock Exchange in June 2006.