SSY.L Regulatory News (SSY)

SCISYS PLC

('SCISYS' or 'the Company')

Acquisition of web and mobile application development company Xibis Limited

SCISYS PLC ('SCISYS' or the 'Company'; AIM: SSY) - the supplier of bespoke software systems, IT based solutions and support services to the Media Broadcast, Space, Government, Defence and Commercial sectors - is today pleased to announce the acquisition of Xibis Limited ('Xibis'), a provider of web and mobile application development services (the 'Acquisition').

Xibis is a small, innovative software application development company for the Retail and related sectors. It has a proven reputation for delivering high quality and secure web and mobile applications to a number of household names, including Halfords and Interflora, and has developed long-term relationships with its customers generating repeating revenues. SCISYS believes that Xibis will bring additional innovation, rapid response and flexibility to SCISYS' existing capabilities. In particular, Xibis brings a proven capability in rapidly delivering web and mobile applications in the Retail sector, which is a new market for SCISYS. Xibis has also developed 'Internet of Things' applications and is currently exploring the use of mobile iBeacon technology with some of its Retail sector customers.

Xibis has grown strongly during the year ending 31 December 2014 ('FY14') with turnover expected to be around £1m (FY13: £0.8m) and adjusted profit before tax approximately £0.2m. For the year to 31 December 2013 ('FY13'), Xibis reported a loss before tax of £20k (being a profit before tax of c. £0.1m on a like-for-like adjusted basis) and had net assets of £0.44m at that date.

Xibis will operate independently under the continued management of its well-established senior team (which includes its sole vendor shareholder) until at least the end of the earn-out period. Two directors of SCISYS have joined the board of Xibis in a supervisory capacity.

SCISYS expects that the Acquisition will be immediately earnings enhancing.

The consideration for the Acquisition comprises a fixed cash payment of £0.8m (excluding a further payment in the region of £0.6m in respect of cash and near-term equivalents remaining in the business on completion), a potential additional deferred cash payment based on Xibis' final results for FY14, and a subsequent earn-out arrangement. Pursuant to this earn-out arrangement, following finalisation of its results for the year to 31 December 2016, a number of new ordinary shares of the Company may be issued to the vendor dependent on the performance of the business over the two years to that date (capped at a consequent holding of no more than 1% of the Company's issued share capital at that date). Any additional sums due to the vendor will be paid in cash such that the consideration for the Acquisition, including initial and deferred payments but excluding the aforementioned payment for cash and near-term equivalents on completion, shall not in any case exceed £3.2m.

Commenting, Mike Love, Chairman of SCISYS, said:

"I am pleased that we have concluded the acquisition of Xibis and welcome its employees, clients and stakeholders to SCISYS. The Acquisition is in line with our stated strategy to accelerate growth through appropriate acquisitions. Xibis has a culture and ethos that fits well with that of SCISYS; an essential criterion for successful future integration. Xibis also brings with it the means to address the rapidly changing web/mobile markets as they adopt new and innovative technologies. These technologies will eventually be adopted by SCISYS' traditional client base allowing for significant cross-fertilisation between the businesses. We look forward to working together to grow Xibis' business in Retail and other sectors."

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About SCISYS:

Employing nearly 430 staff, SCISYS is a leading developer of Information and Communications Technology services, e-Business and advanced technology solutions. The Company operates in a broad spectrum of market sectors including Media & Broadcast, Space, Government and Defence sectors. SCISYS clients are predominantly blue chip and public sector organizations. Customers include the Environment Agency, the Ministry of Defence, Airbus Defence & Space, Arqiva, Vodafone, the European Space Agency, Eumetsat, the BBC, RNLI and the National Trust. The Company has UK offices in Chippenham, Bristol and Reading and two offices located in Germany. More information is available at www.scisys.co.uk