Elecosoft PLC Acquisition of Shire Systems Limited (6567T)

TIDMELCO

RNS Number : 6567T

Elecosoft PLC

05 July 2018

05 July 2018

Elecosoft plc

("Elecosoft", the "Company")

Acquisition of Shire Systems Limited

The Board of Elecosoft announces the acquisition of Shire Systems Limited ("Shire Systems"), a profitable leading UK provider of computerised maintenance management software (CMMS), from Shiresoft Ltd, for a total consideration of GBP6.3m in cash; comprising an enterprise value of GBP5.1m on a cash and debt free basis, and an estimated GBP1.2m net cash, subject to review of the completion accounts and working capital.

The acquisition is a significant advancement in Elecosoft's successful strategy of investing in synergistic software products and technologies to strengthen its construction software portfolio. It will extend Elecosoft's software portfolio beyond early stage project planning, design and construction applications, to asset maintenance management applications for plant and equipment and building life cycle management.

Shire Systems is based in Southampton from where it services a nationwide customer base. Its core product is Pirana, and as at the end of 2017 it boasted over 800 active customers and organisations engaged in a diverse range of industries.

We extend a warm welcome to the Shire Systems team who bring extensive knowledge and experience to the Elecosoft group.

The Board of Elecosoft is confident that Shire Systems' asset maintenance and management expertise together with Elecosoft's BIM industry expertise and construction data storage capability will provide significant opportunities for the development of new software applications in the post construction phase of the life of a building.

Financial Highlights

Shire Systems reported revenues of GBP1.9m for the year to 31 December 2017, and profit before tax of GBP0.7m, adjusted to add back GBP0.3m of exceptional vendor remuneration. Net assets reported at 31 December 2017 were GBP1.1m. Unaudited management accounts of Shire Systems for the first five months of 2018 show revenue of GBP1.0m and profit before tax of GBP0.4m, after adjusting for revenue deferrals to align with Generally Accepted Accounting Principles. The Board of Elecosoft anticipates that the acquisition will be earnings enhancing in the second half of the year ending 31 December 2018.

The acquisition will be financed by incremental borrowings of GBP6m as part of a new 5 year fixed term loan of GBP8m from Barclays Bank, which will provide the necessary finance to accommodate the GBP5.1m acquisition of Shire Systems on a cash free debt free basis, and the consolidation of Elecosoft's existing borrowings of GBP2m into the new Facility.

John Ketteley, Executive Chairman of Elecosoft plc, said:

"The acquisition of Shire Systems represents another significant milestone in the development of Elecosoft as a leading provider of co-ordinated BIM led software systems for the construction industry. The addition of Shire Systems computerised maintenance management software to Elecosoft's existing software portfolio will enable Elecosoft to provide construction companies and property investors with a CMMS solution.

The acquisition of Shire Systems represents another step towards achieving Elecosoft's objective of developing a comprehensive BIM led program of co-ordinated software applications for use in each stage of a building's life cycle, both before and after completion of the build phase."

For the purposes of Article 7 of EU Regulation 596/2014, this announcement contains inside information.

**Ends**

 
For further information, please contact: 
Elecosoft plc                                         Tel: [phone] 
JHB Ketteley, Executive Chairman 
Jonathan Hunter, Chief Operating Officer 
 Simon Morgan, Finance Director 
 
  finnCap Ltd                                           Tel: [phone] 
Adrian Hargrave / Kate Bannatyne (Corporate Finance) 
Camille Gochez (Corporate Broking) 
 
  Redleaf Communications                                Tel: [phone] 
Elisabeth Cowell / Fiona Norman 
 

About Elecosoft plc

Elecosoft is a specialist international provider of software and related services to the Architectural, Engineering, Construction and Owner-Operator industries and digital marketing industries from centres of excellence in the UK, Sweden, Germany and the US. Elecosoft's market leading software solutions are developed by teams in the United Kingdom, Sweden and Germany; and its software solutions cover project management, construction site management, estimating, timber engineering, 3D design and visualisation, and cloud based digital marketing solutions. Elecosoft is listed on the Alternative Investment Market in London (AIM: ELCO).

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July 05, 2018 02:00 ET (06:00 GMT)