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RNS Number : 1249O
PROACTIS Holdings PLC
04 August 2014
Date: 4 August 2014
On behalf of: PROACTIS Holdings PLC ("PROACTIS" the "Company"
or "the Group")
Embargoed until: 0700hrs
PROACTIS Holdings PLC
Acquisition of Intelligent Capture Limited
PROACTIS Holdings PLC, the specialist Spend Control software
provider, is pleased to announce that it has acquired the entire
issued share capital of Intelligent Capture Limited ("IC"), one of
the UK's leading providers of document scanning and optical
character recognition services, to support the launch of PROACTIS'
new offering, 'Activate' ("the Acquisition").
Acquisition Highlights
-- Brings business critical commercial, operational and
technical expertise to support the roll-out of the Group's new
milestone offering, Activate
-- Over 40 new customers to the Group with significant scope for
cross-selling opportunities
-- Clients follow a subscription based business model with high
retention rates
-- Annual recurring revenue to be acquired as part of the
Acquisition is anticipated to be in excess of GBP1.25 million and
total revenues of approximately GBP1.5 million
The consideration for the Acquisition is GBP1.55 million,
payable in cash and shares. The net cash consideration is
approximately GBP1.40 million as IC has approximately GBP0.15
million of cash at completion.
For the year ended 31 March 2014, the unaudited accounts of IC
showed turnover of GBP1.41 million on which it made an operating
profit of GBP0.21 million. Net assets at that date were GBP0.3
million.
Activate
Activate is the Group's new offering to its customer and vendor
network and marks a significant milestone in the Group's strategy
for growth.
The objective of the offering is to create a Global Trading
Network between PROACTIS' customer base and their vendors. The
Global Trading Network will encourage electronic trading, which is
currently poorly adopted, creating efficiencies within the buy/sell
transaction process. These efficiencies will be realised by
significantly reduced costs for the Group's customers and also for
their vendors, whilst also creating new commercial opportunities
for both.
Activate increases transparency within the payment cycle for
vendors by clearly showing where its purchase invoice is in the
invoice processing cycle. Consequently, this creates an opportunity
for vendor financing and PROACTIS is currently exploring financing
options to accompany the Activate offering in order to capitalise
on this opportunity. PROACTIS estimates that its customer base is
spending approximately GBP60-80 billion per annum with their
vendors.
IC's technology and expertise in the delivery of 'bureau type'
invoice scanning and translation services will be instrumental in
shaping the technological solution as well as the commercial and
operational roll-out of Activate.
Information on Intelligent Capture Limited
IC is one of the UK's leading providers of document scanning and
optical character recognition services, and is currently a business
partner of PROACTIS. IC has more than 40 clients and generates over
GBP1.25 million of profitable, annual recurring annual income. The
blue chip customer base includes BT, Screwfix, BDO and
Henderson.
Customers of both PROACTIS and IC can look forward to the
delivery of broadened services and solutions to support their
operations and enhance purchasing efficiency. In addition, IC's
customers will now have access to truly "end-to-end" procurement
solutions from the enlarged PROACTIS Group.
Further information on the Acquisition
The cash element of the consideration will be GBP1.25 million,
payable at completion, and PROACTIS will also issue to the vendor
of IC ("the Seller") 511,334 new ordinary shares of 10p each in the
capital of the Company ("Ordinary Shares") to the value of GBP0.3
million. These Ordinary shares will be subject to lock-in
conditions over a period of one year from completion. Furthermore,
should the Company or finnCap Limited introduce a buyer within that
lock-in period for all or some of those Ordinary Shares, at a price
of 75p or more per share, the Seller will be obliged to sell those
Ordinary Shares.
The Group will support the Acquisition with additional bank debt
which will be provided by HSBC Bank plc by way of a Term Loan of
GBP1.0 million repayable over four years at an interest rate of
2.65% per annum over LIBOR.
Application has been made for the 511,334 new Ordinary Shares to
be admitted to trading on AIM ("Admission") and dealings are
expected to commence at 8.00 a.m. on 7August 2014. The new Ordinary
Shares will rank pari passu with the Company's existing Ordinary
Shares.
The total number of Ordinary Shares in issue following Admission
will be 38,765,993. There are 63,777 Ordinary Shares held in
Treasury. Accordingly, the figure of 38,702,216 may be used by
shareholders as the denominator for 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 FCA's
Disclosure and Transparency Rules.
Rod Jones, CEO commented:
"IC is a crucial strategic acquisition for PROACTIS,
accelerating and de-risking the execution of Activate. We have
developed Activate through listening to the needs of our customers
- there will be obvious cost benefits to them and these benefits
will be replicated for their vendors. In addition, IC consolidates
the Group's existing excellent customer base and has encouraging
levels of recurring revenue and profitability.
"We have worked successfully with IC for some time, partnering
in several key accounts. Its expertise in this area is exceptional
and we look forward to working with the team to drive PROACTIS'
strategy forward, and to deliver returns for shareholders."
Enquiries:
PROACTIS Holdings PLC
Rod Jones, Chief Executive Officer Via RedleafPolhill
Tim Sykes, Chief Financial Officer
RedleafPolhill
Rebecca Sanders-Hewett
Jenny Bahr
Rachael Brown 0207 3824730
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 approximately 500 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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