PROACTIS Holdings PLC Acquisition (8749N)

TIDMPHD

RNS Number : 8749N

PROACTIS Holdings PLC

03 February 2016

 
 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 GBP4.5 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 capital 
 
   -- Annual recurring revenue from Due North is approximately GBP1.6 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 GBP100 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 GBP2.0m on which it made an operating profit (before depreciation and amortisation) of GBP0.5m and its reported net assets were GBP2.3m. For the financial year ended 30 November 2015, Due North's unaudited management accounts report a revenue contribution of GBP1.8 million with EBITDA of GBP0.4 million and profit before tax of GBP0.2 million. The total value of the net assets being disposed of as at 30 November 2015 was approximately GBP2.5 million.

Further information on the Acquisition and new banking facilities

The gross cash consideration payable at completion is GBP4.5 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 GBP3.0 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 
 Rod Jones, Chief Executive     Via Redleaf Communications 
  Officer 
  Tim Sykes, Chief Financial 
  Officer 
 Redleaf Communications 
 Rebecca Sanders-Hewett 
  Sarah Fabietti 
  Harriet Lynch                 0207 382 4730 
 
 finnCap Limited 
  Stuart Andrews 
  Carl Holmes                   0207 220 0500 
 
 

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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February 03, 2016 02:00 ET (07:00 GMT)