Ideagen to buy software firm for up to £12m
Information management software provider Ideagen is to buy software firm PleaseTech for up to £12m on a cash and debt-free basis, which will be partly funded from an equity placing.
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The company will pay £10m upfront in cash, all funded from a placing at 75p each, and a further £2m will be paid within six months of completion of the deal depending on PleaseTech achieving certain performance targets.
Conditional on completion of the placing, chief executive David Hornsby plans to sell up to 801,500 of his shares in the company at the placing price, while certain directors and senior management also intend to exercise 2.2m share option and then sell 1.16m of these at the placing price.
The acquisition is line with Ideagen’s strategy of buying complementary business with strong intellectual property and recurring revenue.
Following completion of the acquisition PleaseTech’s document review and co-authoring product PleaseReview will be integrated with Ideagen's quality management system, Q-Pulse, to enhance functionality to existing and new customers.
PleaseTech’s 2016 revenue increased 45% to £3.9m, compared to the previous year, while earnings before interest, tax, depreciation and amortisation (EBITDA) surged 72% to £1.3m.
Chief executive David Hornsby said: "PleaseTech both increases Ideagen's footprint in two of its key verticals and broadens its customer base geographically whilst providing valuable cross-selling opportunities and additional sources of recurring revenues.”
Shares in Ideagen were up 6.38% to 75p at 0945 GMT.