Ideagen Share Discussion Threads

[multibagger] 28/9/2018 06:27

Well...SP has crept up yesterday and I guess we could see +4-5p on the back of this announcement and touching on 170p ? :)

[rivaldo] 28/9/2018 06:20

Looks terrific - and immediately earnings-enhancing.

A bargain price too, paying £20.5m for £2m EBITDA, with high recurring revenues and a terrific blue chip client base.

Interesting also that they say the "combined business will....represent the clear number 2 vendor in the Internal Audit Market which the board believe will provide an opportunity to further increase market share."

[multibagger] 28/9/2018 06:06

Looks like another fantastic acquisition....

Acquisition of Morgan Kai Group Ltd

RNS

RNS Number : 2471C
Ideagen PLC
28 September 2018

28 September 2018

Ideagen PLC
("Ideagen" the "Company" or the "Group")

Acquisition of Morgan Kai Group Ltd

Ideagen PLC (AIM: IDEA), a leading supplier of Information Management software to highly regulated industries, is pleased to announce the acquisition of the entire issued share capital of Morgan Kai Group Ltd ("Morgan Kai") for a net consideration of £20.5m (the "Acquisition").

Highlights

· Morgan Kai is a profitable and growing software company that has developed a leading Internal Audit Management product 'MKinsight';

· MKinsight is used by over 370 customers across a number of highly regulated vertical markets including public sector, banking and finance, engineering, healthcare and energy;

· With operations in Leeds and Chicago, Morgan Kai currently employs 28 people and provides further infrastructure and customers to support the Group's global growth objective;

· Over 77% of customers are international with 28% based in the USA;

· Customers include the UK's National Audit Office, the Federal Reserve, Investec, the New York Stock Exchange, Shell, Bombardier and Blue Cross Blue Shield;

· The addition of MKinsight to the Group doubles the existing Ideagen Internal Audit business providing scale, enhanced technology and a strong competitive position;

· On a current run rate Morgan Kai is generating approximately £5.3m in revenues, current run rate recurring revenue is £3.2m with an adjusted run rate EBITDA* of £1.7m; and

· The Acquisition is expected to be immediately earnings enhancing and is expected to contribute £2.0m additional EBITDA for the year ended 30 April 2020 following the realisation of £0.3m synergies.

Consideration for the Acquisition

The total net consideration payable is £20.5m in cash being £22.4m gross consideration payable by Ideagen less cash balances in Morgan Kai of approximately £1.9m.The consideration will be funded from the proceeds of the Group's recent share placing and from existing cash reserves and will be paid in full on completion. Morgan Kai was the "Near Term Target" referred to in the Company's announcement of 13 September 2018.

David Hornsby, Executive Chairman of Ideagen, commented:

"Morgan Kai is an extremely valuable addition to the Group and is in line with our strategy of acquiring GRC business that have strong IP and growing recurring revenues. Internal Audit has represented a core market for Ideagen since the acquisition of Pentana in 2013, the addition of MKinsight to our product portfolio will enhance our scale and capability and provide a strong platform for continued growth globally."

Further information with regard to the internal audit management market and Morgan Kai is set out below.

The information communicated in this announcement includes inside information for the purposes of Article 7 of Regulation 596/2014

Enquiries:

Ideagen plc
01629 699100
David Hornsby, Executive Chairman
Ben Dorks, Chief Executive


Graeme Spenceley, Finance Director






finnCap Limited
020 7220 0500
Henrik Persson/James Thompson (Nomad)

Alice Lane (ECM)





Audit Management Market
Internal Auditors independently and objectively evaluate, analyse and assess the effectiveness of an organisation's system of internal control, governance processes and risk management capability. The auditors provide assurance, insight and recommendations on operational improvements to the board of directors, senior management and business process owners. Auditors do this through both auditing and consulting activities. The audit management solution market automates internal audit operations, such as audit planning, scheduling, work paper management, time and expense management, reporting, and issue management.

Ideagen have operated in the internal audit market since the acquisition of Pentana in 2013, since then the Group has doubled the revenues winning important customers such as Dun and Bradstreet, Bank of New York, Commerzbank, Sainsbury's Bank and Carnival Cruises. The Board estimates that the Annual Market Size for Internal Audit software is approximately £200m.

Information on Morgan Kai Group Ltd.

Founded originally in 1999 as an Audit Consulting Business, Morgan Kai has developed a leading Audit Management application MKinsight. Morgan Kai is a UK business based in Leeds with a subsidiary company Morgan Kai Group Inc which is based in Chicago. Morgan Kai employs 28 staff who will remain with the business. The current CEO and primary shareholder, Paul Gascoigne and his co-director Tanya Gascoigne will leave the business after a 3 month handover period.

Morgan Kai have successfully developed a number of vertical markets including Local Government, National Audit Offices, Engineering and Manufacturing, Banking and Finance, Oil and Gas, Energy and Healthcare. The customer base is global in nature with strong presence in USA (28%), and UK (23%) with the remaining 49% spread across Europe, Asia and Africa.

The combination of Pentana and Morgan Kai will provide a strong platform to continue the growth in this core market providing enhanced scale, market coverage and technical capability. The combined business will generate approximately £10m in revenue in the year to 30 April 2020 and represent the clear number 2 vendor in the Internal Audit Market which the board believe will provide an opportunity to further increase market share. Moreover, synergies of approximately £0.3m have been identified, these relate predominantly to IT infrastructure costs and marketing spend and will be realised within the year to April 2020.

In the year ended 31 December 2017 Morgan Kai Group Ltd generated PBT of £0.9m and had net assets of £0.4m at 31 December 2017.

[leavers] 26/9/2018 10:23

Funny you say that as I literally just started buying back in! Will buy fully back at 150 if it gets there or just settle for whatever I get if it doesn’t!

[fizzypop] 25/9/2018 08:18

leavers - heading in our direction.

[igoe104] 24/9/2018 14:55

Another contract win.


EPCOR in project with Ideagen to upgrade safety and quality
24 September 2018




EPCOR, the Dutch maintenance, repair and overhaul (MRO) organisation for the global aviation industry, is to implement a software solution from Ideagen to enhance both safety and quality management.
Ideagen Q-Pulse, Ideagen’s flagship quality management software, will improve processes around audit performance as well as help to surface trends from audit findings and highlight key safety issues.
The system will also allow EPCOR to control general operational business processes as it continues a period of rapid growth.
Ali Nekoui, Safety and Quality Engineer at EPCOR, said: “In the company’s early days our main tasks involved work for KLM but since then the business has expanded globally and we maintain APU’s and pneumatic components for other airlines now, with around 100 clients globally.”
Ali continued: “It was for this reason that we decided to completely upgrade both of our quality and safety management systems and associated processes.
“Q-Pulse will make it possible for us to conduct enhanced analysis of our occurrence reporting. We want to be able to look closely at our data and highlight the main topic trends that are emerging from our operations. This will let us see how we are performing in certain areas across the organisation, providing us with the data needed to make key operational decisions such as whether we need to start an investigation or begin corrective action procedures.”
Mr. Nekoui added: “Q-Pulse will allow us to check graphical analysis and dig into our data for more in-depth information. The power to be able to do that through Q-Pulse will be key for us and provide an immediate oversight of safety.”
Founded in 1999 and based at Amsterdam’s Schiphol Airport, EPCOR overhauls auxiliary power units (APU) and pneumatic components for a variety of aviation organisations.
The organisation was initially launched through a joint venture between Hamilton Sundstrand and KLM, and is a 100% owned subsidiary of Air France Industries KLM Engineering & Maintenance (AFI KLM E&M). EPCOR counts the likes of Air Canada, Egypt Air, Virgin Atlantic and China Southern Airlines amongst its global client base.
Ideagen is a UK-headquartered, global software firm that provides software and services to some of the largest organisations in the world. Its diverse and varied customer base includes many well-known, global brands such as International Airlines Group (IAG), Aggreko, BAE, Ryanair, US Navy, KLM, BBVA, Commerzbank, Meggitt, Heineken, Johnson Matthey, Haeco Group and European Central Bank. As well as this, Ideagen counts 180 hospitals across the UK and US amongst its client base.

[petewy] 21/9/2018 15:39

Write up is IC is by Harriet Clarfeldt who also recommends Elecesoft. I own all she recoomends. (Or am I HC)

[speedsgh] 21/9/2018 10:25

'Kiss of IC' ;-)

Share price taking a well-earned breather. It is nearly the weekend after all.

[rivaldo] 20/9/2018 21:45

IDEA are one of the main Tips of the Week in tomorrow's IC, headed up "Ideagen adds fuel to rapid growth".

Nice :o))

OT : and the first person to say "kiss of death" gets taken away and shot for predictability!

[speedsgh] 17/9/2018 13:44

Thanks for that, rivaldo. If they can get a decent foothold in US, growth prospects will help to support the high rating.

[cheshire man] 17/9/2018 10:52

Excellent news rivaldo thanks for posting :-)

[rivaldo] 17/9/2018 10:50

News - another American contract win:



"Ideagen to help Summit Aviation achieve cost and labour savings via First Article Inspection software
17 September 2018

The US-based aviation maintenance, repair and overhaul (MRO) and manufacturing organisation will adopt Q-Pulse FAIR to help with contracts relating to Airframe OEM’s

Ideagen has announced it is to work with a prominent US-based aviation organisation in a project that will ease first article inspections and 3D model conversions.

Summit Aviation, founded in 1960, will implement Ideagen’s Q-Pulse FAIR software, part of Ideagen's Q-Pulse Product Management suite, to boost efficiencies and reduce costs during projects with clients such as Boeing, Sikorsky and Northrop Grumman.

As part of its services, the company – acquired by Greenwich AeroGroup ten years ago – is required to carry out first article inspections, also known as FAIs, relating to parts including tailbooms, engines, landing gears and wing ribs.

Andy Bullock, Summit Aviation’s Director of Quality says the project will help the company save “thousands of dollars” and “hundreds of hours of labour”.

“We believe this project will provide us with around a 50% saving in labour,” said Mr Bullock. “In 2016, our Kentucky plant completed more than 1000 FAIs which equated to around 4,000 man hours so you can imagine the costs associated with that.

etc"

[yump] 17/9/2018 09:46

Its a never ending guess, trying to work out whether the companies you're invested in are ever going to get the 'city' bonus of funds / bulk clients buying in that takes the p/e's up to 30/40... there's plenty that run up well and then just don't keep going. INSE a case in point. IDEA seems to have the magic factor, but anticipating it seems impossible, other than just staying invested for as long as it takes, or doesn't.

[jimbowen30] 17/9/2018 09:45

This is undoubtedly a high quality business with lots of global growth potential. Another new breakout today. Won't be long before management's 200p target is met.

[petewy] 17/9/2018 09:43

On Friday Questor told readers to sell IG from prtflio and he would, in a few weeks, give an alternative IT share. So we all wait for him...perhaps it's IDEA.

[rivaldo] 17/9/2018 09:39

The presentation to the City about the new acquisition must have been rather impressive......

[yump] 17/9/2018 09:31

I wonder if there's an increasingly concentrated pot of money looking for good companies to invest in (given the pile of dross that's around), as this is on quite a racey rating now. Or is it just that its one of the few companies that hasn't had a 'hiccup' of some sort ?

[multibagger] 17/9/2018 09:26

Now 174p :)

Strong interest continues....good luck all !

[cheshire man] 14/9/2018 09:14

Great hike in share price today and very glad to be fully loaded :-)

[multibagger] 14/9/2018 09:00

Good call Janeann( as your track record shows that you are more often right than wrong ) to double up on IDEA !!

Stonking run today !

[multibagger] 14/9/2018 08:57

Heavens above !

Looks like 160-170p may be taken out by the end of next week ?

[rivaldo] 14/9/2018 08:25

Nice - 875,000 shares just bought at 157p.

Evidently the institutions who were heavily scaled back want to get their full allocation....

[multibagger] 14/9/2018 05:31

Good morning all :)

The share price already appears to have factored in the dilution...remember IDEA are looking at 3 acquisitions (at least) over the next 6 months...and the first one in about 4 weeks is earnings enhancing and also appears to have high recurrent revenues. Also other companies that they they are looking at will consolidate their position in the aviation sector and allow a new foray into environmental health.

At the Mello 2018 meet, I seem to recall them intending to double their revenues in three years.Historically, they have been growing 20-25% every year.This is very much a part of their buy and build strategy. They have a very focussed sales conversion method and tracking system (which Ben Dorks went into detail at Mello 2018) - hence they are able to give better guidance than many other companies.

After this share price lull to digest the placing and the positive sentiment for the company, I feel that a share price of 160-170p by the end of the calendar year (caveat of force majeure) is possible....let's see what happens !

Good luck all !

[breeze3337] 13/9/2018 22:01

A 7% dilution. Will the share price reflect this on placement of the new shares?

[janeann] 13/9/2018 21:24

Thanks multi; decided to double my very small holding following the announcement - disappointed it didn't drop a little more but I am sure this will be an easier ride than some other stocks I know! also had a few more ltg first thing.