Investor news

Trading Update, Proposed Acquisition of DecTech Solutions Pty Ltd

Published: Thursday April 24, 2014

Trading Update, Proposed Acquisition of DecTech
and Conditional Placing of 8,000,000 Ordinary Shares at 137.5 pence to raise £11 million

GBG, the identity intelligence specialist, is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of DecTech Solutions Pty Ltd, an Australian provider of fraud detection, credit risk management and customer management solutions for a total consideration of £20.5 million1.

Trading update

  • In an update to the Pre-Close Trading Statement issued on 7th April the Board is pleased to report that GBG has achieved a stronger set of results than was estimated at that time, which will be ahead of market consensus. The Board now expects to show an adjusted operating profit† of approximately £7.2 million (2013: £5.5 million) representing a year on year increase of approximately 30%

Acquisition highlights

  • DecTech is a provider of established fraud detection and prevention solutions across multiple languages, clients and geographies where GBG does not currently operate
  • DecTech's software and solutions are used by many Tier 1, 2 & 3 banks around the world as well as powering the Korean fraud bureau
  • The acquired technology complements existing GBG solutions with real time analytics extending GBG's capabilities to new areas such as credit application support and ongoing transaction monitoring. It will also enable GBG to offer additional products and services to existing customers
  • DecTech has strong recurring revenues at circa 70%, high margins and is cash generative
  • The Acquisition is expected to be earnings accretive in the first full year post acquisition
  • The Acquisition is conditional upon Admission

Placing highlights

GBG intends to raise approximately £11.0 million before expenses through a placing by Peel Hunt of 8,000,000 new ordinary shares of the Company of 2.5 pence each at a price of 137.5 pence per share 

  • The Placing Price represents a premium of approximately 3.4 per cent. to the closing mid-market price of GBG's existing ordinary shares of 2.5 pence each on 23 April 2014, being the last practicable date before this announcement
  • The Placing Shares represent approximately 6.8 per cent. of the Company's issued share capital following Admission
  • Directors and senior management have subscribed for Placing Shares in total for approximately £505k
  • The Placing is conditional upon Admission

1 At an exchange rate of 1 GBP: 1.85 AUD

† Adjusted operating profit means profits before share of results from associates, interest, tax, share based payment charges, amortisation of acquired intangibles and exceptional items.

†† Adjusted Revenue

What we're talking about

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