PROACTIS Holdings PLC Acquisition of EGS Group Limited (5553X)
January 14 2014 - 2:00AM
UK Regulatory
TIDMPHD
RNS Number : 5553X
PROACTIS Holdings PLC
14 January 2014
Date: 14 January 2014
On behalf of: PROACTIS Holdings PLC ("PROACTIS" the "Company"
or "the Group")
Embargoed until: 0700hrs
PROACTIS Holdings PLC
Acquisition of EGS Group Limited
PROACTIS Holdings PLC, the specialist Spend Control software
provider, is pleased to announce that it has entered into an
agreement to acquire the entire issued and to be issued share
capital of EGS Group Limited ("EGS") for GBP2.9 million, payable in
cash on completion ("the Acquisition"). The net cash consideration
is expected to be approximately GBP2.2 million as EGS is expected
to have approximately GBP0.7 million of cash at completion.
Highlights
-- The enlarged Group will be the largest independent
eProcurement solution provider to the UK Public Sector
-- EGS brings over 70 new clients to the Group, managing more
than GBP2.5 billion of spend through 40,000 suppliers
-- More than 90% of clients follow a subscription business model
with 3 or 4 year terms contracts
-- Acquired annual recurring revenue is anticipated to be more
than GBP1.6 million
-- Operational synergies will enhance Group profitability
-- Funding requirement satisfied with non-dilutive capital
Information on EGS
EGS is a well-respected competitive solution provider and has
more than 70 clients (principally in the Public Sector) that use
its hosted software to control more than GBP2.5 billion of spend
through 40,000 active suppliers. The Directors believe that the
Acquisition will further strengthen PROACTIS' footprint in the
sector and strengthens the Group's position as the largest
independent eProcurement solution provider to the UK Public Sector
covering approximately 200 Public Sector organisations controlling
over GBP15 billion of public spending across approximately 150,000
suppliers.
EGS' substantial expertise in the Local Government and Higher
Education sector, allied with the complementary nature of PROACTIS'
expertise and solutions, means that customers can look forward to
the delivery of even more robust and broad solutions that they can
leverage to support their operations, enhance their procurement
effectiveness and extend collaboration with their suppliers. As
part of PROACTIS, EGS' customers will have access to truly
"end-to-end" procurement solutions that are necessary for Public
Sector organisations to make Spend Control processes feasible on a
large scale.
In addition, there are a number of cost based synergies that can
be realised through the combination.
For the year ended 31 December 2012, the audited accounts of EGS
showed turnover of GBP2,759,000 on which it made an operating
profit of GBP404,000. Gross assets at that date were
GBP1,431,000.
Further information on the Acquisition
Completion of the Acquisition is conditional principally upon
exercising and completing certain 'drag along' rights set out in
EGS' articles of association in respect of certain minority
shareholders. Completion of the Acquisition is expected to occur on
or around 31 January 2014.
The Group will fund the Acquisition from a combination of bank
debt and its own cash resources. Bank debt will be provided by HSBC
Bank plc by way of a Term Loan of GBP1.5 million repayable over
four years at an interest rate of 2.65% per annum over LIBOR.
Rod Jones, CEO commented:
"I am delighted to announce our proposed acquisition of EGS. EGS
is an excellent strategic fit for PROACTIS creating what I believe
will be the largest independent eProcurement solution provider in
the Public Sector specifically and the UK market generally. Its
substantial scale, level of profitability and available synergies
will immediately benefit the wider PROACTIS business.
"I look forward to being able to report further progress as we
work together through the integration of the businesses over the
coming months."
Enquiries:
PROACTIS Holdings PLC
Rod Jones, Chief Executive Officer Via Redleaf Polhill
Tim Sykes, Chief Financial Officer
Redleaf Polhill
Rebecca Sanders-Hewett
Jenny Bahr
Rachael Brown 0207 382 4730
finnCap Limited
Stuart Andrews
Charlotte Stranner 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 is
used in over 300 organisations around the world from the
commercial, public and not-for-profit sectors.
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.
CLOUD COMPUTING is defined as location-independent computing,
whereby shared servers provide resources, software, and data to
computers and other devices on demand, as with the electricity
grid.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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