Accesso Technology Group PLC Acquisition of Ingresso Group Limited - Update (2635B)

TIDMACSO

RNS Number : 2635B

Accesso Technology Group PLC

31 March 2017

Acquisition of Ingresso Group Limited - Update

The following amendment has been made to the 'Acquisition of Ingresso Group Limited' announcement released on 30.03.2017 at 07:00 under RNS No 9599A

The following sentence has been added to the 'Funding' section:

"The total available for drawdown is subject to a reduction of US$10.0m on each of the first, second and third anniversaries of the Extended Facility."

All other details remain unchanged.

The full amended text is shown below.

30 March 2017

accesso Technology Group plc

("accesso" or the "Group")

Acquisition of Ingresso Group Limited

Adds a leading Global Distribution System for entertainment ticketing to accesso's product portfolio

Presents multiple opportunities for revenue growth by significantly enhancing and expanding accesso's existing technology and eCommerce capabilities

Progresses accesso along a strategic path to transform the inefficient and fragmented distribution of entertainment and leisure tickets

The Board of accesso Technology Group plc (AIM: ACSO), the premier technology solutions provider to leisure, entertainment and cultural markets, is pleased to announce the acquisition of Ingresso Group Limited ("Ingresso"), a Global Distribution System for entertainment ticketing (the "Acquisition") pursuant to the terms of a share sale and purchase agreement entered into on 30 March 2017 (the "Acquisition Agreement").

Founded and headquartered in the UK, Ingresso provides live access to ticketed events worldwide across multiple platforms, languages and currencies. Ingresso owns and operates a software platform which enables venue operators, event producers and inventory aggregators to offer real-time digital sales through global third party distribution channels. Ingresso also connects some of the world's largest eCommerce companies to event ticketing systems, allowing them to sell tickets to entertainment events under their own brand and payment systems. It counts Lastminute.com, Cirque du Soleil, Amazon tickets and Yplan among its international partner base. Ingresso also facilitates B2C sales of ticketed events though a range of white-label partner eCommerce sites.

Acquisition Highlights

The Directors believe that the Acquisition will:

-- Further deepen accesso's ability to help its customers drive efficiency and realise greater value from their ticketing operations;

-- Open up a significantly larger global distribution channel through which existing accesso customers can seek to sell their event and attraction tickets;

-- Provide Ingresso with a significant opportunity to grow its business via access to accesso's expansive ticket inventory, eCommerce expertise, infrastructure and global relationships; and

-- Open up opportunities for accesso to address significant inefficiencies within the travel and leisure industry and help clients generate more revenue from third party distribution channels

Commenting on the Acquisition, Tom Burnet, Executive Chairman of accesso said:

"Our guiding purpose at Accesso is to help our clients drive revenue and improve their guest experience. It has been that way from our very first day as a company and today's acquisition of Ingresso deepens that commitment further still.

The ticket and the experience surrounding its purchase are absolutely central to our customers' operations and our potential for growth. For many of our customers, access to third party distribution channels for ticket sales is an important revenue stream. In acquiring Ingresso, we will help connect venues with their visitors via third party distribution outlets in a technologically and financially efficient service-minded manner. We will open up our customers' venues to a significantly larger pool of potential visitors, while also creating new opportunities for growth through combining our platforms, leveraging our scale and deepening our relationships in the industry."

Commenting on the Acquisition, Steve Brown, President and Chief Executive Officer of accesso said:

"Third party sales channels are more popular than ever before as a means for consumers to purchase tickets to their favourite show, attraction or event. With the addition of Ingresso's technology and expertise, we have the opportunity to transform a process throughout the worldwide leisure and entertainment industry that today is complicated, inefficient and largely manual. This acquisition is another step forward in our efforts to deliver value-added solutions that help our customers drive more revenue and improve their guests' experience. I would like to extend a warm welcome to all of our new Ingresso colleagues, clients and partners."

Bart Van Schriek, Chief Executive Officer of Ingresso added:

"Along with the entire Ingresso team, I am thrilled to be joining Accesso. The cultures and values of our two companies are very similar: both innovative, both passionate about the customers we serve and both absolutely convinced of the potential our technologies have to create a new wave of value at all levels of the entertainment industry. I look forward to working with our new colleagues as we roll up our sleeves and take on the significant opportunity ahead of us."

Overview of Ingresso

Founded in January 2011, Ingresso is a leading global digital distribution system for entertainment and travel activities ticketing. Headquartered in London, Ingresso has developed and scaled a unique middleware platform that is capable of aggregating the highly fragmented world of entertainment ticket and leisure product providers in to one global marketplace.

Today, much of the world's entertainment tickets are handled via manual solutions or through a number of complex, non-compatible inventory management systems. Distributors only gain access to a small portion of available tickets and have little control over their pricing, positioning or availability. At the same time, ticket purchasers often find themselves in a cumbersome situation whereby they purchase tickets across a variety of sales outlets.

Ingresso's technology addresses these challenges by directly connecting the ticketing systems at venues, events, theme parks and attractions with the global range of distribution outlets, enabling large-scale websites real-time access to worldwide, date, time and event-specific ticket inventory. This capability allows ticket distributors to sell a much wider variety of tickets, and provide their customers with actual valid-for-admission tickets rather than cumbersome vouchers which are often required to be exchanged for an actual ticket at the venue. Ingresso currently connects some of the world's largest companies to event ticketing systems, and counts Lastminute.com, Cirque du Soleil, Amazon Tickets and Yplan among its international partner base.

The vendors of Ingresso include Walvis Participaties (a Dutch venture capital fund), Oakfield Capital Partners (a UK private equity firm), the management of Ingresso and certain minority shareholders ("the Vendors").

Rationale for the Acquisition

With a global market size of c.$89bn, the entertainment and travel activity ticketing markets are both large and fragmented. These markets are well-placed to benefit from the efficiencies of a digital and better co-ordinated supply platform. All of accesso's success to date has been in the provision of similarly efficient and value-creating technologies across the leisure, entertainment and cultural markets. The Acquisition allows for further development of these capabilities within the accesso offering.

The Directors believe the Acquisition will increase accesso's ability to help existing and future customers (leisure, entertainment and cultural attraction operators) drive efficiency and realise greater value from their business. Ingresso will open up to these customers a significantly larger, more flexible and better co-ordinated global distribution channel through which they can reach event and attraction ticket buyers.

They also believe that the Acquisition will provide Ingresso with a significant opportunity to grow its own business via access to accesso's expansive ticket inventory, eCommerce expertise, global infrastructure and relationships. New opportunities will also exist to cross-sell the Ingresso offering with all of accesso's existing service lines.

In addition, the Directors believe that the Acquisition will enable accesso to target inefficiencies within the broader ticket distribution market, by applying the capability of the Ingresso platform to eliminate the need for coupons and vouchers and, instead, provide a direct and valid ticket.

Terms of the Acquisition Agreement

accesso has agreed to acquire the entire issued share capital of Ingresso Group Limited from the Vendors for an initial cash consideration of GBP17.5m, on a debt free cash free basis, with an additional payment in respect of surplus working capital in the business at closing of GBP1.3m, plus an earn out payment.

The earn out may be payable in 2018 based on the financial performance of Ingresso for the year ended 31 December 2017 exceeding its financial performance in 2016. The earn out payment, capped at GBP10.5m, is payable in cash and is secured by a floating charge on the assets of Ingresso.

The total aggregate consideration excluding the working capital adjustment, is capped at GBP28.0m, assuming that the earn out is achieved in full.

The Acquisition Agreement contains limited warranties from the Vendors as to title to shares and capacity to sell, whilst customary warranties and indemnities relating to the business of Ingresso have been obtained, up to a maximum liability cap of GBP750,000. The Company has put in place a warranty and indemnity insurance policy under which the liability limit for claims is GBP15,000,000 (subject to the terms of the policy).

The Board expects the Acquisition to be earnings accretive in 2017.

Funding

The consideration will be funded through an extended facility with Lloyds Bank plc ("the Extended Facility"). The Extended Facility provides the Group with the ability to draw down $60m, denominated in either US dollars, GB Pound Sterling or Euros, and has a term of four years, with an option to extend by a further twelve months at the end of the first year. The Extended Facility is at an agreed rate of 140 basis points above LIBOR at a borrowing to EBITDA ratio of less than 1.5 times, rising to 190 basis points if the borrowing to EBITDA ratio is greater than 2.25 times. The Extended Facility provides an additional accordion mechanism allowing for a further $10m relating to future acquisitions, and includes a commitment interest on undrawn funds of 35% of margin. The total available for drawdown is subject to a reduction of US$10.0m on each of the first, second and third anniversaries of the Extended Facility.

The Extended Facility has an arrangement fee of $350,000 and has been secured over accesso's assets and intellectual property of the Group in the US and UK. The Group is comfortable with its remaining headroom to deliver this acquisition and pursue its strategy beyond.

Financial Information

During the year to 31(st) December 2016, Ingresso recorded revenue of GBP43.1m, profit before tax of GBP0.6m, profit after tax of GBP1.3m and had net assets of GBP1.6m.

The above revenue of GBP43.1m adopts a revenue recognition policy whereby Ingresso accounts for certain revenue on a gross basis where it takes the view that it acts as principal for certain transactions. The Group intends to review the appropriateness of this policy in due course. If the Group were to account for Ingresso revenue on a net basis then reported revenue would have been approximately GBP8.2m for the year ended 31 December 2016.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, please contact:

accesso Technology Group plc [phone]

Tom Burnet, Executive Chairman

Steve Brown, Chief Executive Officer

John Alder, Chief Financial Officer

FTI Consulting, LLP [phone]

Matt Dixon, Adam Davidson

Canaccord Genuity Limited [phone]

Simon Bridges, Martin Davison

Numis Securities Limited [phone]

Simon Willis, Mark Lander

About accesso Technology Group

accesso (AIM: ACSO) is the premier technology solutions provider to leisure, entertainment and cultural markets. Our patented and award-winning technology solutions drive increased revenue for attraction operators while improving the guest experience.

Our solutions add value to operators at every point of the guest experience with our technology facilitating the key points of contact with their many millions of guests.

We drive attendance

The accesso Passport(R) and accesso ShoWare(SM) ticketing suites are comprehensive, easy-to-use cloud solutions that process tens of millions of tickets every year for assigned seat and general admission venues, enabling operators to maximize up-sell and cross-sell with ease to drive greater revenue.

We handle payments

Our payment gateway carries level 1 PCI security certification and 24/7 support. It provides the tools, security and support operators need to drive sales and has so far processed more than $5 billion in transactions.

We take guests out of line

Since 2001 more than 11 million guests have used a patented accesso LoQueue(SM) solution to queue less, ride more, enjoy a better experience and increase in-attraction spend.

We simplify point-of-sale

Our accesso Siriusware(SM) point-of-sale solution offers software modules that combine ticketing, membership, retail, food/beverage transactions, rentals, credit card processing and many other functions into a single system eliminating the need for separate systems and databases.

Attractions and venues worldwide currently employ accesso technology - from theme parks, water parks, cultural attractions, live performance venues and sporting events to ski and snow parks. We are proud that the majority of the leading names in the leisure industry including Six Flags Entertainment, Cedar Fair Entertainment, Merlin Entertainments, International Speedway Corporation, Palace Entertainment, Compagnie des Alpes and Herschend Family Entertainment, trust our solutions.

accesso is a public company, listed on AIM: a market operated by the London Stock Exchange. For more information visit: www.accesso.com

ENDS

This information is provided by RNS

The company news service from the London Stock Exchange

END

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March 31, 2017 13:31 ET (17:31 GMT)