appScatter Group PLC Acquisition of Abilott Ltd (6035K)

TIDMAPPS

RNS Number : 6035K

appScatter Group PLC

17 December 2018

17 December 2018

appScatter Group plc

("appScatter" or the "Company")

Acquisition of Abilott Ltd (the "Acquisition")

appScatter Group plc (AIM: APPS), the intelligent app management platform, is pleased to announce that it has signed an agreement to acquire 100 per cent. of the share capital of Abilott Limited ("Abilott") for an initial consideration of GBP1.245 million, and a potential further consideration of up to GBP1 million dependent on the attainment of specified performance targets in the 12 months after completion (the "Acquisition").

About Abilott

Established in 2007, Abilott provides digital security solutions, specialising in companies who are launching new products or seeking to become a gaming operator or expanding into new global territories. Customers include Gamesys, Paddy Power, Betfair, Virgin Games, Bodog.

Abilott helps both established organisations and emerging clients, providing security services for data and IT infrastructure with technologies such as Distributed Denial of Service, Penetration testing and Zero Day Vulnerability reporting. Abilott also provide consultancy services helping business reach compliance in a number of areas, such as GDPR, ISO27001, PCI-DSS or regulations from the UK gaming Commission.

Background to and reasons for the Acquisition

The acquisition of Abilott is in line with the Company's strategy to develop its mobile app management platform and follows the acquisition of Priori Data GmbH in July 2018. The Company continues to assess further opportunities to accelerate the development of the platform.

Abilott has been working closely with appScatter for the last two years providing Security & Regulatory Compliance for the Group and supporting appScatter threat analysis products for appScatter customers. The Acquisition presents appScatter with an opportunity to increase its current security products offered whilst increasing margins to existing and planned customers for current products. In addition, Abilott will assist in the building of the automated GDPR compliance app tools into the appScatter platform. As a result of the Acquisition the enlarged group will not only be able to identify security issues in customers mobile applications but also to rectify the issues identified, thereby significantly increasing the revenue opportunities from each Enterprise customer.

For the year ending 30 September 2017, Abilott generated revenue of GBP1.5 million and a loss before tax of GBP170,998. Abilott had net liabilities at 30 September 2017 of GBP217,544.

Principle terms of the Acquisition and Consideration

The maximum consideration for the Acquisition is GBP2.245 million, comprising of GBP1.245 million in the initial consideration plus ("Initial Consideration" and up to a further GBP1 million payable by the award of deferred consideration shares ("Deferred Consideration Shares"). appScatter is acquiring Abilott on the basis that it holds net liabilities as at 17 December 2018 of GBP100,000.

The Initial Consideration for the Acquisition is GBP1.245 million, comprising GBP500,000 in cash (the "Cash Consideration"), GBP245,000 in Director Loans and GBP500,000 by way of the issue of 1,666,666 new ordinary shares in the Company (the "Initial Consideration Shares") at an effective issue price of 30 pence per ordinary share ("Ordinary Shares"). The Cash Consideration will be satisfied from existing cash resources, of which GBP200,000 is payable immediately and the further GBP300,000 is payable within 150 days of the completion of the transaction.

Application will be made for the Initial Consideration Shares, which will rank pari passu with the Company's existing Ordinary Shares, to be admitted to trading on AIM ("Admission"). Dealings in the new Ordinary Shares are expected to commence at 8.00 a.m. on 21 December 2018.

The Acquisition has been structured with a significant contingent consideration element, linked to challenging performance targets for Abilott, thereby allowing both parties to share the benefits of efficiencies and growth. The Deferred Consideration Shares are dependent on Abilott achieving revenue criteria in connection with sales to certain customers for the year ending 31 December 2019 and would not be issued until January 2020.

The number of Deferred Consideration Shares, which will be issued fully paid, will depend inter alia on the performance of Abilott in the relevant period and the prevailing shares price. The maximum number of Deferred Consideration Shares is 3,333,333.

Philip Marcella, appScatter CEO, commented:

"The acquisition of Abilott is a strategic milestone for appScatter, enabling us to bring our security services that we previously outsourced in house, significantly improving our margin. Having worked with the Abilott for some time, we are already aware of the benefits the Acquisition brings to our growing product base and the services we can provide to our customers.

"We look forward to welcoming the Abilott team to the appScatter group. The Acquisition, combined with the acquisition of Priori that we completed earlier this year, significantly boosts the overall appScatter offering."

Total Voting Rights

On Admission of the Initial Consideration Shares, the Company will have 91,016,157 ordinary shares of 5 pence each in issue. No ordinary shares are held in treasury. The figure of 91,016,157 may be used by the Company's shareholders as the denominator in the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

For enquiries, please contact:

 
appScatter Group plc                                     Tel: [phone] 
 Philip Marcella, Chief Executive Officer                 www.appscatter.com 
finnCap Ltd                                              Tel: [phone] 
 Nominated Adviser and Broker                             www.finncap.com 
 Jonny Franklin-Adams / Hannah Boros 
 Corporate Broking- Alice Lane 
IFC Advisory Limited                                     Tel: [phone] 
 PR/IR                                                    www.ifcadvisory.co.uk 
 Graham Herring / Heather Armstrong / Florence Chandler 
 

About appScatter Group plc

appScatter is a scalable B2B mobile app management platform with its own data intelligence stack. We track and collect daily data from 1.3 billion unique app URLs across 252 territories. In addition, we have daily audience data on 3.5 billion mobile devices covering 900,000 apps.

The Group's app management platform has 3 core focus areas:

 
 1.   Mobile Asset Management: The ability to manage the distribution 
       of apps across multiple app stores with full reporting on downloads, 
       sales, in-app-purchasing and advertising revenues. Users can 
       access other tools including App Store Optimisation and keyword 
       optimisation. 
 2.   Data Intelligence: Quantitative and qualitative insights on 
       the performance of more than 4 million apps. Including Daily 
       Active Users (DAU), Monthly Active Users (MAU), Average Revenue 
       per Daily Active User (ARPDAU), retention rates, downloads, 
       store revenue, top chart ranks, keyword ranks. We track top 
       performers, top growers, keywords, ranks, version updates, 
       and niche markets. 
 3.   Security & Regulatory Compliance: Identifies if EU General 
       Data Protection Regulation ("GDPR") regulations have been implemented 
       and are being adhered to. Clients can check for data breaches 
       and identify where apps could allow unauthorised access to 
       private data. 
 

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December 17, 2018 02:00 ET (07:00 GMT)